Preamble

The House met at Half past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — MALTA (NEW CONSTITUTION)

Brigadier Mackeson: asked the Secretary of State for the Colonies, when he expects to make an announcement regarding the new Constitution of Malta.

The Secretary of State for the Colonies (Mr. Creech Jones): The drafting of the necessary Instruments has now reached an advanced stage, and a working party from the Colonial Office, including my legal adviser, is at present in Malta discussing details with the Maltese Government and with representatives of the Maltese National Assembly. I am not at present able to state precisely when the new Constitution will come into force, but I trust that, "as a result of the consultations now taking place, the remaining stages will be accelerated.

Brigadier Mackeson: While welcoming that statement, which, I have no doubt, will be equally welcomed in Malta, may I ask the right hon. Gentleman if he will consult the Leader of the House to see whether time could be made available when this very important constitutional scheme could be discussed?

Mr. Creech Jones: There will be an opportunity on a Supply Day, which, I hope, will not be so very far distant.

Oral Answers to Questions — AFRICAN COLONIES

Tanganyika (German Settlers)

Mr. Niall Macpherson: asked the Secretary of State for the Colonies what is his policy in regard to the return of Germans to Tanganyika.

Mr. Creech Jones: Of the former German residents of Tanganyika Territory who were interned in Southern Rhodesia, those who have shown no Nazi or hostile sympathies and who are desirable residents of the Territory in other respects have been allowed to return to Tanganyika. The remainder have either gained admission to other territories or have been, or are being, repatriated to Germany.

Mr. Macpherson: Is the right hon. Gentleman aware of the very strong feeling in Tanganyika about this, especially in so far as the settlers are concerned? Could he indicate what special measures he is taking in regard to the return of these Germans?

Mr. Creech Jones: Yes, there are several Questions today, the answers to which I hope to give a little later.

Mr. Gammans: Can the Secretary of State say how many Germans have been allowed to return or are to be allowed to return, and whether, if and when they do, they will be given full rights, including the right to hold land?

Mr. Creech Jones: There is a Question on that matter that I shall answer in a few minutes.

Mr. N. Macpherson: asked the Secretary of State for the Colonies how many German settlers have so far been authorised to return to their prewar holdings in Tanganyika, and how many to resume their prewar professional, commercial and industrial occupations, respectively.

Mr. Creech Jones: A total of 100 Germans formerly interned in Southern Rhodesia have been allowed to return to Tanganyika. They comprise 49 heads of families—35 men and 14 women—of whom 18 are settlers, three are members of the medical or nursing professions, 19 were formerly engaged in commerce or industry, and nine are returning to live with relations or friends. The position with regard to the settlers is explained in my reply to Question No. 11. Corresponding figures for Germans who were not sent to Southern Rhodesia but remained in Tanganyika during the war are being obtained, and I will send them to the hon. Member as soon as possible.

Mr. Macpherson: Is the right hon. Gentleman aware that some of the


Germans who have been repatriated are at present living in hotels without exercising any profession or business? Can he give the House an assurance that the Germans will not be allowed to come in unless they have some means of support?

Mr. Creech Jones: Many of the Germans concerned, do, of course, belong, by their long settlement in Tanganyika, to that part of East Africa. They are not returning to their farms though they were settlers, and this question of their future settlement and the positions that they will occupy is now receiving the immediate consideration of the local Government.

Squadron-Leader Donner: asked the Secretary of State for the Colonies whether he will give an assurance that British citizens who have been leased estates in Tanganyika, previously held by Germans, will not be ejected in favour of returning Germans, and that alternative properties will be offered to the latter; that, if for any reason any British citizen is required to leave such an estate in favour of a returning German, he shall be paid full compensation for any money spent in improving the properties; and that any Germans who have property re-vested will not benefit by the work put into the estates by the present lessees of such ex-enemy properties.

Mr. Creech Jones: No lessee of an estate in Tanganyika which was formerly held by a German national will be ejected in favour of the former owner during the currency of his lease. The question of the arrangements which will be applied when the present leases expire is being examined by the Tanganyika Government and consideration will be given to all the points to which the hon. Member has drawn attention.

Squadron-Leader Donner: Is the right hon. Gentleman aware that the first part of his answer will give great satisfaction because quite recently a German arrived at a local station and telephoned the British officer at 6.15 in the morning and expected immediate reinstatement?

Squadron-Leader Donner: asked the Secretary of State for the Colonies whether in view of the protests of the British Legion in Tanganyika, as well as the bewilderment of African ex-Servicemen, he will give an assurance that no more Germans, other than the 47 families already

permitted to return, will be allowed to re-settle in the territory.

Mr. Creech Jones: 1t is not the intention of the Tanganyika Government that former German residents in Tanganyika should be allowed to return to the territory, apart from the 49 families who have already been given permission to do so.

Kenya (European Settlers)

Mr. Skinnard: asked the Secretary of State for the Colonies how many European settlers have taken up land in Kenya since the end of the war; how many of these are Kenya nationals; how many are ex-Servicemen from outside Kenya; and how many new settlers have arrived to live in Kenya without taking up land for farming.

Mr. Creech Jones: I am asking the Acting Governor for up-to-date figures and I will send them to my hon. Friend as soon as I receive them.

Mr. Skinnard: Can the Secretary of State give the House any information as to the status of the children of European men and women settling in Kenya and taking up land?

Mr. Creech Jones: I think that all information with regard to settlement and permanent residence in Kenya is supplied by the East African Office. It is now proposed that there should be some immigration legislation, and entries in the future will undoubtedly be controlled.

European Education (Administration)

Mr. Skinnard: asked the Secretary of State for the Colonies what are the terms of reference given to the Committee on European Education set up by the Central African Council; and whether he will establish the principle that there can be no administrative amalgamation of the education departments of Nyasaland, Northern Rhodesia and Southern Rhodesia, on the basis of racial segregation in schools.

Mr. Creech Jones: The terms of reference of the committee are, in brief:

(a) to keep under review the existing arrangements for the education in Southern Rhodesia of European children from Northern Rhodesia;
(b)to recommend an equitable contribution by the Northern Rhodesia Government in respect of the cost of tuition of such children;


(c)to assist the Chief Secretary of the Council in studying the possibility of unification of the European Education Departments in the two territories; and
(d) to study arrangements for Asiatic and Coloured education in Northern and Southern Rhodesia.
As regards the second part of the Question, separate European educational establishments are at present in demand to meet practical requirements in all the Territories concerned. The committee has not finally reported and there is no cause for me to make any statement at this juncture.

Mr. Skinnard: Will not the right hon. Gentleman agree that the educational attainment of the child should be the basis of entering schools provided by public funds?

Mr. Creech Jones: Obviously, that is a sound principle, but in regard to this problem, one must wait until the committee concerned has made its report.

Oral Answers to Questions — FIJI (LEGISLATIVE COUNCIL)

Mr. Charles Smith: asked the Secretary of State for the Colonies by what method representatives of the Fijian people are selected to sit in the Legislative Council; and when it is intended to introduce the method of election.

Mr. Creech Jones: The five Fijian members are selected by the Governor from a panel of names submitted to him by the Great Council of Chiefs. The Legislative Council of Fiji recently voted by a very substantial majority in favour of the continuance of this method of election, and I am satisfied that no change in the system is at present required.

Oral Answers to Questions — PALESTINE

Anti-Terrorist Measures

General Sir George Jeffreys: asked the Secretary of State for the Colonies whether he has sent instructions to the High Commissioner for Palestine to the effect that law and order are to be maintained and terrorism stamped out; and what representations have been received from the High Commissioner as to the measures which he considers necessary for this purpose.

Mr. Creech Jones: The High Commissioner is well aware of the policy of His Majesty's Government, which is that every effort should be made to maintain law and order in Palestine and to suppress lawlessness and terrorism. He has indicated that his existing instructions give him all necessary latitude.

Sir G. Jeffreys: Is it not a fact that the High Commissioner has recently intimated that if the Armed Forces were allowed to exert their full power against the whole Jewish community, terrorism could be eradicated in a very short time indeed? In view of that fact, why is such authority not given to the High Commissioner? Indeed, why are not orders given to him to use the full power of the Army?

Mr. Creech Jones: There has been no withholding of the necessary authority to the High Commissioner in respect of the representations he has made. Indeed, he has always taken the view most strongly that suppression of terrorism is not a matter of military operations so much as a matter of police work.

Explosion, Tel Aviv

Mr. Lipson: asked the Secretary of State for the Colonies if he will make a statement on the failure of the recent attempt to blow up the British headquarters at Tel Aviv when a Palestinian Jew, Zeev Werber, sacrificed his life to save the lives of 300 British troops.

Mr. Creech Jones: Shortly after 11 o'clock on 18th of June an explosion occurred in the basement of a house near the Military Cantonment in Citrus House, Tel Aviv. On investigation the body of a young Jew was found at the opening of a tunnel leading in the direction of Citrus House. The tunnel was timbered and construction must have been in progress for some time. In the basement was a chalked message in Hebrew, reading, "The Hagana were here. We want you by force not to carry out your evil intention. Signed Hagana." Outside the building was a vehicle loaded with cement which had been removed without permission from the Municipal garage. It appears that the Hagana had learnt that an attempt by terrorists to blow up Citrus House was in progress, and had decided to frustrate it by blocking the entry to the tunnel with cement. The entry had, however, been booby trapped; and when


the leader of the Hagana party, identified as Zeev Werber, the son of a municipal employee in Tel Aviv, attempted to enter, he was fatally wounded by an explosion. His funeral in Tel Aviv the next day was attended by representatives of the District Commissioner and of the Superintendent of Police in recognition of the fact that he had lost his life as a result of action which had probably prevented a serious terrorist outrage and consequent British casualties.

Mr. Lipson: Is not co-operation on the part of Hagana very much to be welcomed in combating terrorism? May I ask whether any pension will be payable to the dependents of this young Jew who gave his life? Is the right hon. Gentleman also aware that in the first report in "The Times" this man was described as one of the terrorists? Fortunately, the "Express" had the correct version. Is it not rather unusual for the "Express" to be more correct than "The Times"?

Mr. Creech Jones: I cannot answer the last part of the question but it may be that "The Times" misreported it. It is a fact, of course, that Hagana has played some limited part in trying to root out terrorism and suppress this evil. I must say that the British Government would wish for a larger measure of cooperation than has so far been forthcoming.

Mr. Lipson: Will the right hon. Gentleman answer the part of my question dealing with compensation?

Mr. Creech Jones: I should require notice of that.

Squadron-Leader Fleming: May I ask whether any steps are being taken to recognise the gallantry of this young Jew?

Mr. Creech Jones: That is a matter for the Palestine Government. I confess that we have not given consideration to it.

Oral Answers to Questions — COLONIAL EMPIRE

Press Conferences

Wing-Commander Roland Robinson: asked the Secretary of State for the Colonies whether he will now arrange to meet at least once a month the corre-

spondents of colonial newspapers in London and the editors of other journals concerned with Colonial matters in order to enable the Colonial newspapers concerned to be kept fully up to date with activities of his Department.

Mr. Creech Jones: The information Department in the Colonial Office is now being re-organised. When this reorganisation is complete it is proposed to institute a regular monthly press conference particularly for the correspondents of Colonial newspapers in London and for editors of other journals concerned with Colonial matters. These conferences will normally be conducted by my Director of Information Services.

News Releases

Wing-Commander Robinson: asked the Secretary of State for the Colonies whether he is aware that the London correspondents of Colonial newspapers were given no access to his Department's release of news about major schemes of development in the Colonies; that at the conference several days afterwards, no additional information was given to them; and whether he will give an assurance that in all releases of news with regard to Colonial developments, the correspondents of Colonial newspapers in London and all journalists specialising in Colonial matters will be enabled to get information published in Colonial newspapers at the same time as it can be published in London and dispatched overseas by the news agencies.

Mr. Creech Jones: I presume that my hon. and gallant Friend refers to reports recently published of plans to review the production of foodstuffs and other essential commodities in the Colonial Empire. No news release on this subject was made by the Colonial Office, but a reference in this House gave rise to speculation in the Press. As a result my Press Officers were given information which was then made available to all inquirers. In view of the interest in the subject it was thought that representatives of the Colonial specialist Press would welcome an opportunity of meeting a senior official of the Colonial Office and a conference was arranged accordingly. The purpose of this conference was not to release, news but to give background information the answer to the last part of the Question is; "Yes, Sir."

Commodity Production

Sir John Mellor: asked the Secretary of State for the Colonies when he proposes to issue a White Paper concerning commodity production in the Colonial Empire.

Mr. Creech Jones: No, Sir, but with the permission of the hon. Member, the House, and Mr. Speaker, I will make a statement at the end of Questions.

Governors and Civil Servants (Salaries)

Mr. Gammans: asked the Secretary of State for the Colonies whether the salaries of Colonial Governors and Colonial civil servants have been augmented to meet the increased cost of living; and whether, in view of the natural reluctance of Colonial governors to raise the question of their emoluments, he will, if satisfied that there are good grounds for doing so, bring the point to the notice of the local legislatures.

Mr. Creech Jones: In nearly all Colonies the salaries of civil servants either have been revised or are in process of revision. Cost of living allowance schemes operate in practically all Colonies where salaries have not yet been revised. Improvements in the effective emoluments of Governors—which include salary, allowances and privileges—have also been made in a number of cases and will be considered in others as and when occasion arises.

Mr. Gammans: But what is happening in the Colonies where no increases have taken place? Does not the right hon. Gentleman feel that he has a responsibility in view of the fact that these officers are appointed by the Secretary of State?

Mr. Creech Jones: Of course, we have a measure of responsibility, but I think that I can say in all cases, in all the territories throughout the Empire, this matter has received the attention either of the Colonial Office or myself directly and certain steps have been taken.

Mr. Stanley Prescott: Can the right hon. Gentleman say how many of them get a salary of £3,700 a year or above?

Mr. Creech Jones: I should require notice of that question.

Development Plans (Dominion Assistance)

Brigadier Mackeson: asked the Secretary of State for the Colonies what steps His Majesty's Government has taken to ensure that the Dominions are allowed to play a full part in the formation and execution of plans for expanding the output of industry and agriculture in the Colonies.

Mr. Creech Jones: The United Kingdom Government are aware of the part which the Dominion Governments can play in the field of Colonial development. Already in a number of important respects, close co-operation has been established. So far as expansion of production in industry and agriculture is concerned, the Dominions are, of course, much occupied at the moment with their own economies and the expansion of their own productive capacity. The assistance of the Dominion Governments will, I am sure, be readily forthcoming as necessary in the larger Colonial development plans, and there will undoubtedly be opportunity for Dominion investment in this field.

Major Legge-Bourke: Have the Dominions been invited to join the Economic Advisory Council, and what has the Council done so far?

Mr. Creech Jones: I hope that I may be in a position to circulate a statement to the House in regard to the work of the Economic and Development Council, but in all our development work there has been very close contact with the Dominion Governments, and we have received in some of our schemes very practical assistance indeed.

Brigadier Mackeson: Would the right hon. Gentleman try to let us have that before the Supply Day, if that is possible?

Mr. Creech Jones: I am hurrying it on, but it is a matter for the printers now.

Mr. Wilson Harris: Has any Dominion Government made any contribution to the Colonial Development Fund?

Mr. Creech Jones: I am not aware of it.

Education, Tanganyika

Brigadier Mackeson: asked the. Secretary of State for the Colonies whether


he has examined the recommendations of the Development Commission of Tanganyika as to African educational requirements in the next 10 years; and how these recommendations are to be financed.

Mr. Creech Jones: I have examined the recommendations, which have been generally endorsed by the Advisory Committee on Education in the Colonies, and I have informed the Governor that I am prepared to approve them. It is proposed that the ten-year plan shall be financed as follows: From the Territory's resources and surplus balances, £3,537,000; from the resources of the Native Administration, £605,000; from the Colonial Development and Welfare Vote, £1,250,000 — total, £5,392,000. These financial arangements are subject to the approval of the Tanganyika Legislative Council as far as expenditure from the Territory's funds is concerned and to the concurrence of my right hon. Friend the Chancellor of the Exchequer as regards the proposed grant under the Colonial Development and Welfare Act. The plan has still to be considered also by the Advisory Committee on African Education in Tanganyika. I am sending a copy of the plan to the hon. and gallant Member.

TRINIDAD (COST OF LIVING)

Mr. H. Hynd: asked the Secretary of State for the Colonies what action has been taken by the Government of Trinidad to implement the recommendation of its Cost-of-Living Committee that the prices of essential foodstuffs should be subsidised; and whether any action is to be taken in response to the committee's criticism that the Government's import policy compels Trinidad to buy in a dear market.

Mr. Creech Jones: A policy of food subsidisation has been in operation for some years in Trinidad. Proposals for increasing subsidisation expenditure in order to reduce the cost-of-living index by 10 points from 220 to 210 have recently been agreed in principle by the Finance Committee. It is proposed that the cost of these measures should be met partly from Trinidad revenues and partly from a grant by His Majesty's Government. The necessary vote to authorise such a grant will be brought before Parliament in due course. As regards the second part of the Question, the Governor reports that

import control is effected with the object of conserving "hard currency," and in some instances this involves purchases from the sterling area at higher prices than those for which similar goods could be purchased from "hard currency" countries. Since April last, however, licences have been issued for the importation from any source of certain essential consumer goods which are in very short supply.

Mr. Oliver Stanley: Could I ask the Secretary of State whether this assistance from the Colonial Office Vote to reduce the cost of living where that is increased by the necessity of sterling control, will be extended to other Colonies which are in the same position?

Mr. Creech Jones: I cannot give a definite promise that it will be extended, but it is a matter which is under constant discussion with the Treasury, and I think both the Colonial Office and the Treasury take a reasonably sympathetic view in regard to the matter.

Squadron-Leader Donner: Will the right hon. Gentleman say whether it is possible to extend similar help to other West Indian Colonies?

Mr. Creech Jones: I have just said that the whole problem has the constant attention of the Colonial Office and the Treasury.

Oral Answers to Questions — ROYAL NAVY

Docks, Rosyth and the Clyde

Colonel J. R. H. Hutchison: asked the Parliamentary Secretary to the Admiralty when he proposes to make a statement regarding the future of Rosyth dockyard and the project of establishing a graving dock in the Clyde.

The Civil Lord of the Admiralty (Mr. Walter Edwards): The future of Rosyth Dockyard is still under active consideration, and although I cannot say when a decision will be taken, I hope that it will be at no very distant date. The question of a new graving dock requires detailed examination of a number of different factors and is unlikely to be decided for a considerable time.

Colonel Hutchison: May I ask the Civil Lord whether the Chiefs of Staff have given any decision about the strategic advantages of Rosyth which was so apparent during the two great wars?

Mr. Edwards: The Chiefs of Staff are, of course, taken into consultation on these matters, and everything they have said is being borne in mind.

Mr. Gallacher: Would the Civil Lord arrange for me to have a talk with the Chiefs of Staff, so that I can get them to make up their minds over this question, which has been hanging fire for two years now?

Mr. Edwards: I am afraid I shall have to ask the Chiefs of Staff whether they would consider that.

Commander Galbraith: Does the hon. Gentleman realise the great handicap to recruiting in Scotland and the North-East coast of England as a result of there being no home port in this part of the country?

Mr. Edwards: We have been shown no evidence of that.

Mr. Thornton-Kemsley: Will the hon Gentleman bear in mind that Rosyth is the only docks on the North-East coast and that it provides deep water anchorage for the whole of the Home Fleet in a comparatively safe area?

Mr. Edwards: We are, of course, fully aware of that.

Mr. Kirkwood: When will the Admiralty make up their minds that we are to have this graving dock on the Clyde, where we have built the finest ships which have sailed the Seven Seas, including the "Queen Mary," the "Queen Elizabeth" and the "Vanguard." Is the Civil Lord aware that these ships are going down to Southampton in order to be equipped, when they could come back to the Clyde to be finished? We have been pushed off for years; surely, it is time for them to decide? I would like to know when they are coming to a decision?

Mr. Edwards: I think the answer to that supplementary question is given in the second paragraph of my original reply. My hon. Friend will find that we are examining the matter, but it must take some time before a decision can be reached.

Mr. Kirkwood: The Admiralty have been examining it ever since the present Government came in. We do not want an examination, we want a dock.

Commander Noble: During discussions with the Chiefs of Staff, would the Minister bear in mind the apparent influence of the Minister of Defence in this direction?

Colonel Hutchison: In view of the unsatisfactory nature of the reply, and the period of time over which this matter has dragged on, I beg to give notice that I will raise it on the Adjournment.

Allowances, Greece

Sir Wavell Wakefield: asked the Parliamentary Secretary to the Admiralty if he is aware of the hardship being caused to naval officers and ratings, now serving in Greece, due to the inadequacy of their allowances on account of the present rate of exchange between drachma and sterling; and what action he is taking to remedy this hardship.

The Parliamentary and Financial Secretary to the Admiralty (Mr. John Dugdale): Officers and men of the Royal Navy now serving in Greece are in the same position as members of the Army in this matter, and I would therefore refer the hon. Member to the reply given yesterday by my right hon. Friend the Secretary of State for War. The allowances for members of the Naval forces will be reviewed at the same time as those of the other Services.

Sir W. Wakefield: But is the Parliamentary Secretary aware that this matter has been dragging on now for 18 months? Why cannot this be put right and a decision be given now? Is he further aware that this hardship is greatly increased by the quite inadequate stocks kept by N.A.A.F.I., and can he not do something in that direction to try to meet this hardship?

Mr. Dugdale: As regards the second part of the supplementary question, that seems to be another matter. As regards the first part, my right hon. Friend the Secretary of State for War said yesterday that the allowance was reviewed recently. It has been reviewed from time to time and will be reviewed again.

Lieut.-Commander Gurney Braithwaite: But in view of the fact that the Secretary of State for War told us yesterday that this matter is being examined jointly by the Navy, Army and Air Force, will the Senior Service perform its proper function


of taking the lead in this matter and see that review and discussion are translated into action and remedy?

Mr. Dugdale: They act in co-operation with the other Services. It is not a question of taking the lead; they all act together.

Mr. Piratin: Will not my hon. Friend agree that the best way out of this dilemma is to bring all our officers and men back from Greece?

Vice-Admiral Taylor: Can the Parliamentary Secretary inform the House whether action will be taken in regard to the review which is being undertaken by the Services in this matter, and will it not be a matter of ordinary procedure that the Services should take action in accordance with what is the currency in these nations and adjust the pay of the Services accordingly?

Mr. Dugdale: We are certainly anxious to take action as soon as the review can be completed, but I cannot promise when it will be. I hope it will be soon, because we are just as anxious as hon. Members are to see that these men are not put to any hardship at all.

Commander Noble: Is it not a fact that the Treasury has already agreed to this increase for the staffs of the Embassy and the Economic Mission, and why should there be any delay with regard to the Services?

Mr. Dugdale: That seems to be quite another question.

Hon. Members: It is not.

Mr. Dugdale: I have no doubt that it will be taken into account when we are discussing the matter with the Treasury.

Aircrews (Operational Stars)

Sir Ian Fraser: asked the Parliamentary Secretary to the Admiralty whether the Royal Navy intend extending to naval aircrews the same rules with regard to the granting of operational stars to ferry and transport pilots as now apply in the R.A.F.

Mr. Dugdale: Yes, Sir.

Sir I. Fraser: Will the hon. Gentleman inform their Lordships that this decision will give some pleasure, and will he-tell

them that it is satisfactory to the friends of the Senior Service to see them so successfully trying their wings?

H.M.S. "Terrible," Devonport (Electric Cable)

Mrs. Middleton: asked the Parliamentary Secretary to the Admiralty what use has been made of the electric cable which had been reeved, clipped, and connected to H.M.S. "Terrible" at Devonport and which, under a recent order, consequent upon alterations of specifications, was removed.

Mr. Walter Edwards: The cable removed from H.M.S. "Terrible" will be used as far as possible in other ships and shore establishments.

Mrs. Middleton: Is my hon. Friend aware that the cable could have been salvaged, but that was not done, and will he please explain to the House why this wanton wastage is allowed in the dockyards, and what he proposes to do in order to stop it?

Mr. Edwards: I cannot see where the question of wanton wastage comes into it. We say that we shall use the cable as far as possible in other ships and establishments, and what cannot be used will be handed over to salvage.

Mrs. Middlton: Is the Civil Lord aware that the cable was cut into short lengths which it is not possible to use again and that rewinding could have taken place, salvaging a great part of it, if care had been taken in giving orders to that effect?

Mr. Edwards: If my hon. Friend likes to give me details of the allegations made, I will go into them carefully for her, but my advice up to now is that there has been no misuse of this cable at all.

Oil Waste Discharges, Cawsand Bay

Mr. Douglas Marshall: asked the Parliamentary Secretary to the Admiralty if he is aware that Maker Parish Council has complained that landing craft have been discharging waste fuel-oil in Cawsand Bay; that the foreshore has been covered in oil and people have had their clothes ruined; and if he will take the necessary action to prevent a recurrence of this nuisance.

Mr. Dugdale: I am informed that the Maker Parish Council wrote to the King's


Harbour Master, Plymouth, on 9th June complaining of oil fuel pollution in Caw-sand Bay, and that an acknowledgment of this letter was sent by the King's Harbour Master on 10th June asking for details of the time and date of the alleged pollution in order that the matter might be fully investigated. The Council's reply is still awaited. I can assure the hon. Member that the Naval authorities at Plymouth make every effort to prevent contamination by His Majesty's ships. King's Regulations and Admiralty Instructions, in fact, state that:
to pump overboard in harbour or basin, or within 50 miles of any coast, any oil fuel, oily refuse, or bilge water, etc., which may contain oil fuel residue is strictly forbidden.

Mr. Marshall: Is it possible for the Admiralty to find out what type of vessels were in the vicinity of Cawsand Bay at the time mentioned?

Mr. Dugdale: I can state that, among other vessels, there were six landing craft which have been sold to the Greek Navy and are on their way to Greece. They were there, and it is possible that pollution may have been caused by them, but I cannot say, because we got the information so late that it was impossible to take any action.

Mr. Marshall: If information does reach the Admiralty that this occurrence had nothing to do with the Royal Navy, will the hon. Gentleman give publicity to the fact?

Mr. Dugdale: Certainly.

Coal Consumption (Tugs)

Mrs. Middleton: asked the Parliamentary Secretary to the Admiralty how much coal is consumed each week in stoking up tugs, other than duty tugs, which are subsequently not brought into use.

Mr. W. Edwards: Coal-fired tugs are used only in naval dockyards. All those in use are duty tugs and are normally employed at some period during the day. In any isolated case where a tug is for some reason not used, the coal consumption under banked fires is under five cwt. per week.

Mrs. Middleton: Is my hon. Friend aware that tugs other than duty tugs are stoked up every Saturday morning and

not subsequently used, and will he take steps to see that this wastage of fuel is stopped immediately?

Mr. Edwards: I am afraid that my hon. Friend and myself are getting different information. If my hon. Friend would be good enough to let me have the source and type of information which she receives, I shall be only too glad to go into the matter.

Blackburn Aircraft

Mr. J. Langford-Holt: asked the Parliamentary Secretary to the Admiralty, what aircraft produced by the Blackburn Aircraft Company have been accepted for service by his Department since 1939; which of these types were rejected for any reason; and after what period of service.

Mr. Dugdale: Since 1939, the following types of aircraft produced by the Blackburn Aircraft Company for the Navy have been accepted for service:

(a) The Firebrand torpedo-strike air craft.
(b) The Swordfish torpedo-spotter-reconnaissance aircraft.
(c) The Barracuda torpedo-bomber aircraft.
The Swordfish and Barracuda were designed by the Fairey Aviation Company. None of these aircraft was rejected after service; the Firebrand and Barracuda are in use but the Swordfish has been withdrawn on account of obsolescence.

Mr. Langford-Holt: Is the hon. Gentleman aware of the fact that not one of these aircraft used by the Fleet Air Arm has been a success, and that the performance of the Swordfish was completely ruined when the manufacture was taken over by this company, and that at least one of the aircraft taken over by this firm was little more than a flying death trap?

Mr. Dugdale: No, I cannot accept all those statements, and I ask the hon. Member to await the reply to his next Question which, I think, will answer some of them. From my personal experience, the Barracuda is not as bad as all that. I have landed on an aircraft carrier in one myself.

Mr. Langford-Holt: asked the Parliamentary Secretary to the Admiralty (I) whether the Board of Admiralty is entirely satisfied with the


quality, performance and suitability for naval air service of the Blackburn Firebrand;
(2) for what purpose it is intended to use the Blackburn Firebrand; and for what purpose this aircraft was originally designed.

Mr. John Dugdale: The Firebrand is primarily for torpedo attack. This aircraft was originally designed as a single-seater fighter to be fitted with the Sabre engine. The use of this engine by the Navy had, however, to be given up owing to the greater need of the Royal Air Force. The substitution of another type of engine would have involved a major re-design of the aircraft if it were to fulfil its original function, and before this could have been completed, the aircraft would have been out-dated as a fighter. It was, therefore, decided to develop it for torpedo work. The Firebrand, with the modifications incorporated, has now been cleared for Service use, and the type has satisfactorily completed deck-landing and other tests. A new squadron of Firebrands has just been formed and these aircraft are likely to be retained for front line service until a more modern type is available.

Mr. Langford-Holt: Is the hon. Gentleman aware that this aircraft has reached Mark IV before even going into service with one squadron and that even today far the greater part of its time is spent on the ground on account of unservice-ability? Is the hon. Gentleman aware that the Firebrand is now out of date?

Mr. Dugdale: Every aircraft becomes out of date extremely quickly, but this aircraft is in use, and will be in use until a better type is evolved.

Mr. Langford-Holt: This has been messed about with for five years.

Mr. Mikardo: Is my hon. Friend satisfied that the contact between the designers of the Fleet Air Arm and constructors is sufficiently close, and that it takes place at a sufficiently early stage in development?

Mr. Dugdale: Yes, I am so satisfied and I wish to make it perfectly clear that had the original plans gone through, this plane would have been in service long ago. But at that moment the needs of the Royal Air Force were considered paramount and the needs of this particular

plane for the Navy were sacrificed for that purpose at the time.

Petty-Officers (Pay Code)

Commander Maitland: aske the Parliamentary Secretary to the Admiralty whether he is satisfied that sufficient incentive is offered to petty-officers and chief petty-officers by the new pay code to make a career in the Royal Navy; and what proportion of these ratings, eligible to sign on to complete for pension, are taking advantage of the opportunity to do so.

Mr. W. Edwards: The new pay code has not been in operation long enough to enable us to give considered opinion whether or not there is now a sufficient incentive to encourage men to take up a career in the Royal Navy. With regard to the second part of the Question, I regret that I am at present unable to add to the information given in the reply of 30th April to the hon. and gallant Member. I will, however, inform him further as the necessary figures become available.

Vice-Admiral Taylor: Can the Civil Lord say to what extent the petty-officer and chief petty-officer, particularly men with families, are better off under the new pay code than they were before?

Mr. Edwards: This matter was very fully discussed in the Navy Estimates last year. We feel that under the new pay code they had a far better career in the Navy than has ever been the case before.

Major Bruce: But is my hon. Friend aware that the new pay code varies to the disadvantage of a young petty-officer compared with comparable grades in the other two Services?

Mr. Edwards: I am afraid I cannot accept that. The new pay code has been devised to achieve equality between the three Services. It may be true that a young petty-officer is not getting as much as an old petty-officer, but eventually he will do so.

Mr. Willis: Is my hon Friend aware that many chief petty-officers today are worse off than 25 years ago?

Mr. Edwards: They may be worse off than 25 years ago, but I am sure my hon. Friend will agree that they are far better off than 10 years ago.

Commander Maitland: Is the hon. Gentleman aware that throughout the Navy there is considerable doubt as to whether the new pay code is going to improve the welfare of the men in the Navy? Unless he can give the House a satisfactory answer, will he appoint a Committee to consider whether another new pay code should be introduced?

Mr. Edwards: ; I am afraid I cannot agree that there is considerable doubt about the effects of the new pay code. Apart from the pay codes, we are endeavouring to make conditions of service as easy as possible, and better than they have ever been for the chief petty-officers and petty-officers, and that has to be taken into consideration.

Upper-Deck Ratings (Training System)

Commander Maitland: asked the Parliamentary Secretary to the Admiralty whether he proposes to make any changes in the present system of training upper-deck ratings in gunnery and other technical subjects; and whether he is satisfied that the present system, particularly that part of it which has to be carried out at sea, is producing as good results as the old system involving non-substantive rates.

Mr. W. Edwards: There has not been sufficient time, and circumstances have been too abnormal, for adequate experience to have been gained on the present system of training of upper-deck ratings in technical subjects. I can, however, say that no change in the system is at present contemplated.

Commander Maitland: Does not the Civil Lord realise that just as my previous Question was about welfare, so this deals with efficiency, neither of which is improved by the present pay code. Will he not, therefore, consider setting up a technical committee to examine the whole matter?

Mr. Edwards: I must say that the information which has been provided by the people who have charge of the Navy—the Naval Staff—indicates that that allegation bas no foundation whatever.

Surrendered German Submarines

Commander Maitland: asked the Parliamentary Secretary to the Admiralty how many German submarines were

surrendered to the United States and Soviet Governments under the terms of the Potsdam Agreement; how many of these have now been destroyed in each case; and when this information was received.

Mr. W. Edwards: As was stated in the reply given to the hon. Member for Londonderry (Sir R. Ross) on 30th April last, ten German submarines were allocated to each of the United Kingdom, United States, and Soviet Governments at Potsdam. The remainder were to be destroyed by 15th February, 1946, and of these, four were, reported by the United States Navy in March, 1946, as having been sunk by them by the appointed date. Eleven others were held by the Soviet Navy, and the Soviet Government gave a further undertaking last March that they would fulfil their obligations in this matter by August this year.

Commander Maitland: Can the hon. Gentleman tell the House that these, I think, 21 submarines are all the German submarines which are held by the Soviet Government at the present time in contravention of the Potsdam Agreement?

Mr. Edwards: Actually the number which they are responsible for destroying is 11. They have promised us that they will do that by August of this year.

Sir Ronald Ross: Was any reason given or known to the Admiralty why these submarines should not have been destroyed by the agreed date?

Mr. Edwards: No actual reason has been given, but we are justified in accepting the assurance they have given.

Foreign Service (Reliefs)

Mr. David Jones: asked the Parliamentary Secretary to the Admiralty whether he is aware that personnel of H.M.S. "Wild Goose," now at a foreign station, "are more than three months overdue for relief; that the relief is still at Colombo and cannot leave there until the end of July; and whether he will arrange that men who have served long periods on foreign stations are relieved on time and that reliefs are sent from this country in sufficient time to effect relief at the proper date.

Mr. Dugdale: I can assure my hon. Friend that every effort is made to relieve


men serving overseas on time. In view of his statements I am, however, making inquiries in the case of H.M.S. "Wild Goose," and will inform him further.

Special Entry Cadets (Grants)

Mr. Benn Levy: asked the Parliamentary Secretary to the Admiralty if he can give any indication as to the working of the scheme of financial assistance for special entry cadets introduced last year.

Mr. Dugdale: Yes, Sir. Since the scheme was introduced last September grants varying from £10 to £150 have been made to the parents of 58 cadets entered through the Special Entry Group of examinations. The parents of these boys form an interesting cross section of the community ranging from gas stoker, colliery overman and bench engineer to cost accountant, mercantile marine officer and schoolmaster. There is no doubt that it would have been impossible for a great many of these boys to enter the Royal Navy as officers without this financial assistance. I think the House will agree that the scheme has achieved its object of broadening the field of entry and made it possible for any boy who reaches the required standard to become a Special Entry Cadet regardless of the financial circumstances of his parents.

Prize Money

Mr. Chetwynd: asked the Parliamentary Secretary to the Admiralty if he is in a position to state the amount of prize money available; and when it will be paid.

Mr. Dugdale: As after the 1914–18 War, a considerable time must elapse before the amount of prize money can be determined because in condemning ships and cargoes seized in prize, the Prize Courts throughout the Empire have not distinguished between droits of the Crown and droits of Admiralty. We are trying, in close consultation with the Dominions, India and Burma, to estimate as accurately as possible the amounts which should become available, as droits of the Crown, to be granted for the benefit of the Naval and Air Forces of the Empire. Until returns are received in a common form from all Empire Prize Courts, it will not be possible to frame a sufficiently accurate estimate of the amount or to forecast when grants can be made. I must, however, repeat my former warning that the

amount will certainly be very much smaller than after the 1914–18 War. Legislation will also be necessary, and this cannot be introduced before next Session.

Lieut.-Commander Braithwaite: Will the hon. Gentleman tell us whether the Board of Admiralty have yet decided what will be the service qualification for entitlement to this prize' money when it is available?

Mr. Dugdale: No, Sir. That has not definitely been settled.

Oral Answers to Questions — POST OFFICE

Branch Office, Highbury Corner

Mr. Eric Fletcher: asked the Post master-General when the Highbury Corner branch post office will be reopened.

The Postmaster-General (Mr. Wilfred Paling): Unless unforeseen difficulties arise, I hope it will be possible to reopen a branch post office at Highbury Corner early next year. Negotiations for the lease of suitable premises have recently been concluded and the necessary building alterations, which are being given priority, are in hand.

Collections and Deliveries

Mr. Peter Freeman: asked the Postmaster-General whether he is aware that letters posted in London before 6 p.m. are often not delivered in Newport until 36 hours later, although the train journey is less than three hours; and if he will take steps to see that delivery is effected by the first post following such collections.

Mr. Wilfred Paling: Letters posted in London in time for the 6–6.30 p.m. collection are due to be delivered in Newport (Mon.) by the first delivery on the following week-day. Unfortunately, there have been occasions recently when staffing difficulties in London have made it impracticable to maintain all due course connections and certain letters for Newport (Mon.) may have suffered delay; remedial measures have, however, been taken which I am confident will prove effective.

Mr. Peter Freeman: asked the Postmaster-General whether he is aware that delivery of letters in Newport takes


place between 7 and 8 a.m. and a second delivery about noon; and whether, during the present temporary restrictions, he will arrange for the second delivery in the afternoon instead.

Mr. Wilfred Paling: The postal services in Newport (Mon.) and in towns throughout the country have been modified in order to save manpower and to release staff for production. I regret that an afternoon delivery at Newport (Mon.) could only be arranged by drawing on the manpower which the Post Office has been asked to release for productive industry.

Mr. Freeman: Is my right hon. Friend aware that by having two deliveries in the morning, one following the other almost immediately, many letters which would otherwise reach their destination the same day are held over until the following day, and would he make arrangements so that there would be an afternoon as well as a morning delivery?

Mr. Paling: With our present manpower position I do not think it is possible to do that. We have arranged the second delivery so that business men receive their letters in time to reply to them the same day.

Mr. Keeling: Does not the first reply of the right hon. Gentleman flatly contradict the assurance of the Assistant Postmaster-General a few days ago that letters posted before 6.30 p.m. in London are delivered all over the country next morning except in remote spots like Penzance and Thurso?

Mr. Paling: I think that question refers to the previous Question.

Mr. Keeling: Yes.

Mr. Paling: I said that this particular trouble in Newport has been due to certain difficulties and that we had tried to alter them. I think we have done that.

Mr. Randall: Would not the Postmaster-General agree that if the request in this Question was acceded to, and there was more call upon labour throughout the country, it would mean the employment of part-time labour and split attendances for the staff; and would not he agree that most of the members of the staff in my hon. Friend's constituency would object to that sort of thing?

Mr. Peter Thorneycroft: Why is Newport singled out for this peculiar treatment when there are many thousands of people unemployed in South Wales?

Mr. Paling: Newport is not singled out for treatment as suggested in that question, which relates to the Question I answered previously. As I said, difficulties in Newport were particular difficulties which arose from a certain line of action. We have dealt with that.

Sir Henry Morris-Jones: Could the right hon. Gentleman explain why a London newspaper is delivered in Wales every morning punctually whereas a letter frequently takes two days?

Mr. Paling: No, I cannot tell the hon. Member why on information like that. If he will give me the full information and let me have the dates, I will deal with the matter.

Mr. Martin Lindsay: Does not the Postmaster-General recognise that during the past few months there has been a grave deterioration in postal delivery services not only in Newport, but all over the country?

Mr. Paling: What I do realise is that owing to the changes made and the restrictions in services, there has had to be a certain re-allocation of men, in particular on new duties, and it has taken these men some time to "bed down" and get used to their new routine.

Lieut.-Cammander Braithwaite: rose—

Mr. Speaker: We have been on this Question long enough. Mr. Osborne.

Oral Answers to Questions — WORKING HOURS (GOVERNMENT POLICY)

Mr. Osborne: asked the Prime Minister what is the Government's policy with regard to the five-day week; and if he is satisfied that its general introduction would allow export targets to be reached.

The Prime Minister (Mr. Attlee): The question of working hours is one which falls for determination in accordance with the circumstances of each individual industry. The considerations which the Government feel should guide decisions on this matter are set out in paragraph 136 of the Economic Survey for 1947 (Cmd.


7046), to which I would refer the hon. Member. The last part of the Question is purely hypothetical.

Mr. Osborne: Is it not quite clear that the last part of the Question is not hypothetical, and that if a five-day week is granted to one industry another industry immediately demands it, and therefore, we have to face the fact—

Mr. Speaker: Questions must seek for information, and not produce argument.

Mr. Osborne: Then may I ask for information, Mr. Speaker, whether the Prime Minister will make an appeal to both sides of the House, and to both sides of industry not to follow the shorter working week in view of our great need for increased output?

The Prime Minister: I did not quite catch the hon. Gentleman's question.

Mr. Osborne: Would the Prime Minister appeal to both sides of industry to stop this run on the shorter working week until output has been materially increased ?

The Prime Minister: I have explained that this must be taken industry by industry. Experience has shown that in some industries there is no slackening or falling off in production through the changes in hours. Each case has to be considered on its merits and it is for the two sides of industry to decide.

Mr. Henry Usborne: Is the Prime Minister aware that in a number of engineering firms with which I am acquainted, where the five-day week was introduced by the management—I admit, reluctantly —they have now found by experience that the change has produced efficiency and they are very glad of it?

The Prime Minister: That tribute is a particular example of what happens.

Mr. Thornton-Kemsley: Will the Prime Minister look into this alleged 'bedding down "of postmen which seems to be the root cause of the delay in delivery of letters?

Mr. Stokes: Is not my right hon. Friend aware that in some sections of the heavy engineering industry, it has been proved conclusively that a five-day week produces a great deal more than a five-and-a-half day week.

Oral Answers to Questions — BUREAU OF CURRENT AFFAIRS (POSTER)

Mr. Eden: asked the Prime Minister, whether, in view of the complaints made against the Bureau of Current Affairs as a result of their issuing poster No. 26 of 26th April, 1947, which contained objectionable references to friendly governments and matter of a party political character, he is satisfied that, in future, under the new arrangements, authority will not be given by the Army Council to the publication of similar objectionable matter.

The Prime Minister: I agree that the poster referred to by the right hon. Member should not have been issued for the purpose of compulsory education and I regret that it was. My right hon. Friend the Secretary of State for War has now given instructions that no material to be used for this purpose in the Army is to be acquired from the Bureau of Current Affairs unless it has previously been approved on his behalf. I hope that this arrangement will avoid any further cause for complaint.

Mr. G. Lang: Will the Prime Minister bear in mind the inestimable services that this bureau has rendered [HON. MEMBERS: "Oh."] and also the fact that the criticisms are at least as frequent from the Left as from the Right?

Mr. Speaker: We are only dealing with one poster, No. 26. We cannot deal with the whole question of policy.

Major Legge-Bourke: Is the Prime Minister aware that this particular poster has also been exhibited in local food offices, and will he give some assurance that such posters as this will not be exhibited in offices run by His Majesty's Government?

The Prime Minister: Obviously, that question should be put to my right hon. Friend the Minister of Food. I am not aware of it.

Mr. Eden: Would the right hon. Gentleman be good enough to look into this? I am sure the Government cannot want propaganda of this kind to be issued in Government buildings. I am sure that the Prime Minister feels that. This is the first I have heard about food offices. Will the right hon. Gentleman consider that


all Government Departments should treat this matter equally and be responsible for the non-party character of publications they issue?

The Prime Minister: I was not aware that this bureau was being used by the Food Ministry. As I understand it, this bureau was originally run by the War Office. At the end of the war it became a private firm and it has been utilised since by the War Office. Obviously, in utilising the productions of a private firm, there should be the very greatest care taken by Government Departments.

Mr. Kenneth Lindsay: Is the Prime Minister aware that this is a voluntary body which has a contractual basis with many educational bodies, including three-quarters of the education authorities in this country; and is he also aware that for a whole year they have issued matter dealing with current affairs with growing approval and without any complaint? I agree that this matter was controversial but it is no disrespect to an organisation which is doing valuable work.

The Prime Minister: I am only dealing with a particular instance of' where a Government Department has had certain matter sent to it which it used and which I think it ought not to have exhibited.

Mr. Eden: Would the right hon. Gentleman endorse these words as a description of the view of public opinion on conscription:
Originally the force of Churchill tanks were lined up with the main Government armies against an opposition made up of Liberal Crusaders, together with a mixed force of Socialist moral rearmament and flamethrowers.

Oral Answers to Questions — FOOD SUPPLIES

Rural Building Workers (Rations)

Mr. Driberg: asked the Minister of Food if he will make a statement on the provision of extra rations, mobile canteen facilities or packed meals for building-trade workers in rural districts.

The Minister of Food (Mr. Strachey): Last December I asked local food officers to do everything in their power to help building employers, in both rural and urban areas, to provide packed meals or

canteens for their workers. This campaign has had considerable success, but, because of the practical difficulties, town and suburban workers have benefited most. I have decided, therefore, that from 20th July, when the new ration book comes into use, rural building workers who cannot be given canteens or packed meals shall be eligible for the special cheese ration and for the extra bread which goes with it.

Sugar Allocation

Mr. William Shepherd: asked the Minister of Food whether in view of the indications of an improved sugar position, he will consider making allocations of sugar to office workers for tea making.

Mr. Strachey: I am sorry, but the supply is not good enough for this at present.

Mr. Shepherd: Is it not a fact that the stock position is good and that the international allocation is about to be increased; why should there be this discrimination between industrial workers and office workers? Is it because the latter are unorganised and are of the "tinker's cuss" variety?

Mr. Strachey: I am glad to say that office workers are by no means completely unorganised.

Pig-Killing (Conditional Licence)

Squadron-Leader Donner: asked the Minister of Food whether he is aware that a food executive officer, in a letter to the proprietor of the Station Hotel, Basingstoke, states that he is not permitted to issue a licence to him to kill a pig unless a written undertaking is given that no part of it shall be used in connection with his catering establishment; under what authority the demand for such a written undertaking from the proprietor, as a condition precedent to the granting of such a licence, was made; and whether he will take the necessary steps to abolish this restriction.

Mr. Strachey: Licences to slaughter a pig under the self-suppliers scheme are issued on my authority. For the past seven years it has been one of the requirements that a caterer must give an undertaking not to use any of the meat in any form for the purposes of his establishment. The restriction is made quite clear on the application form.

Squadron-Leader Donner: If the proprietor of a catering establishment could feed his customers in this way, is it not grotesque to prevent it?

Mr. Strachey: No, Sir. I think the dividing line must be drawn between the self-suppliers who do not produce for sale and those who are producing for sale or commerce in any form.

Mr. Walkden: May I ask the right hon. Gentleman not to consider giving way on this point, because if he does, Lyons Bros, would be able to supply themselves with pork from their farms and really they would have good fun out of it?

Mr. Hurd: If the Minister could not allow it in that case, certainly he could allow country hotels to become self-supporting so far as bacon is concerned?

Mr. Strachey: No, Sir. An equal quantity of feeding stuffs would be subtracted from commercial producers.

Agricultural Workers

Mr. Thornton-Kemsley: asked the Minister of Food to whom, in connection with the issue of extra rations of cheese and bread, the description of workers not insured under the Agricultural Unemployment Insurance Scheme but engaged full time under contracts for work in agriculture refers.

Mr. Strachey: These workers include groups of men employed under contract on such tasks as ditching, draining and reconditioning agricultural land; and also hedgers, thatchers and rabbit trappers working under contract.

Mr. Thornton-Kemsley: Would it be possible for the Minister, by the exercise of a little sympathetic imagination, to include farmers' sons in this category provided they were working under contract for their fathers?

Mr. Strachey: The definition is whether or not they are wage earners.

Sub-office, St. Pancras

Dr. Santo Jeger: asked the Minister of Food why he was unable to arrange for the opening of a sub-office, as on previous occasions, for the distribution of the new ration books to people living at the southern end of South-East St. Pancras, who now have to go to Camden Town and wait in long queues.

Mr. Strachey: The food executive officer decided that too few people used this sub-office last year to justify the extra staff needed there. She tells us that its absence has not led to long queues at the Camden Town centre or elsewhere in the Borough.

Dutch Tomatoes (F.O.B. Price)

Mr. Collins: asked the Minister of Food if he is aware that there is no upper limit to the f.o.b. price which can be remitted to shippers of Dutch tomatoes; that many wholesalers are paying to foreign producers prices considerably in excess of the permitted import price; and if he will institute a maximum f.o.b. price related to the import price or vary the present conditions governing the importation and distribution of tomatoes, so that they do not operate inequitably among different sections of traders and result in the expenditure of larger amounts of sterling.

Mr. Strachey: I am grateful to my hon. Friend for raising this matter. It was always the intention that the price paid to the exporter for tomatoes should not exceed the appropriate import sale price prescribed in the Tomatoes Order. We have received reports that the relative provisions of the Control Orders are being circumvented and I therefore propose to make an Order which will have the effect my hon. Friend desires.

Cabbages (Prices)

Mr. Collins: asked the Minister of Food if he is aware that cabbage of the same quality, on a London wholesale market, varied in price per half bag of30 lbs. from 7s. 3d. per lb. on 12th June, 13s. 5d. per lb. on 13th June and 16s. 6d. per lb. on 14th June; that housewives were compelled to pay is. 6d. for a cabbage of inferior quality weighing two lbs.; if, in view of the considerable increase in supplies, he is satisfied that these prices are not unduly high; and whether he will take steps to reinstitute maximum prices and control price fluctuation.

Mr. Strachey: Although supplies of all vegetables have improved and will I am glad to say, improve further, they are still much below normal for this time of year. I shall however take very careful account of the position when this


year's main crops become available, and if prices still remain at an unreasonable level in relation to this year's costs I shall have to reimpose price control.

Mr. Collins: Will my right hon. Friend pay particular attention to the question of cabbages and other greenstuffs and keep the closest possible watch on the matter, because urgent action is necessary owing to the fluctuation in supplies?

Mr. Strachey: Yes, Sir.

COLONIAL DEVELOPMENT (CORPORATION)

Mr. Creech Jones: The Government have been considering the means of developing Colonial resources. They consider that there is need for improved machinery for this purpose. The Colonial Development and Welfare Act provides money for the improvement of the social and other services of the Colonies and helps to provide the basic services for further economic development in the form of improved communications, better agricultural services, water supplies and the like. This has been, and is, very useful. But it is not enough. An instrument is also required whereby we can undertake individual productive projects likely to increase the wealth of the Colonies themselves and to stimulate the supply of products of which this country and the world at large stand in need.
The Government propose, therefore, to establish a Colonial Development Corporation with total borrowing powers of the order of £100 million. It will operate on commercial principles. Its object will bo to establish or assist any enterprise in the Colonies which is designed to increase their general productive capacity. No doubt these enterprises will be mainly agricultural but the Corporation will be able to undertake any enterprise which serves the general object. We propose that the Corporation should be given power to conduct enterprises itself or to set up subsidiary organisations to run individual projects or to give assistance to existing enterprises. The Corporation would undertake particular operations in any Colonial territory only with the consent of the Secretary of State and the Colonial Government concerned. The intention is that the Corporation and its

subsidiaries should operate generally in close consultation with Colonial Governments, in order to ensure that their activities are conducted in the way best suited to promote the welfare of the Colonial peoples.
There would, of course, be no question of giving the Corporation any general monopoly in Colonial development. It is not intended to supplant private enterprise, but to supplement it. While the Government will continue their policy of encouraging public utilities and other suitable forms of public enterprise, they will also welcome private enterprise and investment in the Colonies so long as it is in harmony with the plans of Colonial Governments for social and economic development.
The Government propose to introduce legislation to establish the Colonial Development Corporation. It is proposed that the same legislation should provide for the establishment of the Corporation which is to take over the groundnut project established in East Africa by the Minister of Food. This would be a separate body from the main Colonial Development Corporation and provision would be made for it to undertake enterprises similar to the groundnut project over a wide field.
The two bodies would work in the closest liaison with one another.

Sir J. Mellor: May I ask the right hon. Gentleman to give an assurance that existing undertakings will not be impaired through the new development overtaxing the available resources of labour and materials?

Mr. Creech Jones: Indeed, they will not be prejudiced, they will be encouraged.

Mr. Stanley: While welcoming this valuable piece of new machinery, and, in particular, the Secretary of State's statement as to the important part to be played by private enterprise in Colonial development, may I ask him two questions? The first is: What does he mean when he says that these Corporations are to operate on commercial principles? Does it mean that they will operate on a profit-making basis? Secondly, is it necessary to maintain two Corporations in parallel, and would it not be much better, now that this new overall Corporation is to be


set up, to wind up the Groundnut Corporation and transfer its work to the new body?

Mr. Creech Jones: With regard to commercial principles, obviously, the Development Corporation itself will have a number of undertakings which must be run on commercial lines and must pay their way, and, when it is said that they must run on commercial principles, what will possibly happen will be that what they "lose on the swings they will gain on the roundabouts," but we do not want the charge for any of this to fall on the Treasury. With regard to the second question, the Groundnut Corporation will cover a somewhat wider field than is conceived in the case of the Colonial Development Corporation, and it will be concerned primarily with foodstuffs, but the enterprise is of so large a character that a special utility Corporation is required in order that this work may be done.

Dr. Segal: Would my right hon. Friend give an assurance that the facilities afforded by the new Corporation will be extended equally to the Mandated territories, like Tanganyika?

Mr. Creech Jones: Certainly, under all the Colonial Welfare and Development Acts, the Mandated and trust territories are included.

Sir I. Fraser: Can the Secretary of State say if the High Commission territories of Bechuanaland, Basutoland and Swaziland, which were not covered, will be included in the new scheme?

Mr. Creech Jones: Certainly.

Mr. Thomas Reid: Will the new Corporation operate from London, or will there be sufficient scope for decentralisation, which is essential, in my opinion, in all these Colonial projects?

Mr. Creech Jones: Obviously, the head office must be in London, but the Corporation will "hive off," as it were, certain concerns and enterprises, and they undoubtedly will have their principal offices in the territories with which they are strictly concerned.

Squadron-Leader Donner: Is it the intention of the Government to introduce this legislation during this Session, and will the Sudan be included?

Mr. Creech Jones: I cannot answer with regard to the Sudan, because that is a special problem. As regards the time of legislation, that is a matter for my right hon. Friend the Leader of the House.

Mr. Sorensen: May I ask my right hon. Friend what relationship this Corporation will have to the various local Governments? Will they have any kind of control over the Corporation? May I also ask him if he will say something about Africans on the Board? Will the Board include Africans as well as Colonials and representatives from this country?

Mr. Creech Jones: It is altogether premature to discuss questions of personnel of the Board. That is a point which has not yet been considered by the Government.

Earl Winterton: In view of the tact that, in a number of these Colonies, there is a large and nominated official membership of the Legislative Assembly, who do not always see eye to eye with the elected Members, will the right hon. Gentleman devise machinery by which the elected Members of the Legislative Assembly, in Northern Rhodesia and elsewhere, may be able to present their case for or against any particular project to the right hon. Gentleman himself, in accordance with the principles of democracy?

Mr. Creech Jones: In the first place, in the last three years, the closest contacts have been developed, both through the Government and indirectly, with unofficial members of the Legislative Council and the Colonial Office and the Secretary of State. With regard to the point concerning consultation with Colonial Governments, obviously, the good will, understanding and consent of the Colonial Governments will be required in regard to any project in the territories for which they are responsible, and these projects, obviously, cannot proceed without the closest co-operation with the Corporation at all stages.

Dr. Haden Guest: While welcoming very cordially the extension of large-scale development, especially on a Socialist basis, may I ask my right hon. Friend whether he will provide a full opportunity, before legislation, for a Debate on this matter, because it raises the whole question of the condition of the African


people, which it is quite impossible to discuss by question and answer at the present time?

Mr. Creech Jones: I should say that the position of the African peoples will be adequately safeguarded under any proposals that are brought to the notice of this House. As regards the discussion on the Corporation proposals, when the legislation is introduced an opportunity will obviously be provided. In regard to a general discussion of production inside the Colonial Empire, there will be ample opportunity on the Supply Day.

Mr. Pickthorn: On that last point, since the right hon. Gentleman tells us that these undertakings are to pay their way, has he received an assurance from the Leader of the House that the House is to have an annual opportunity of debate to make sure how and to what extent they are paying their way, and without interfering with the normal Business of the House which, at any rate, does not have too much time; and can we have an assurance now that this is to come up for preliminary review on a special day of its own every year?

Mr. Creech Jones: In answer to the point raised with regard to the work of the Corporation, its finances, and the rest, an opportunity will be afforded on Supply

Day of the Colonial Office for a discussion, but, in any case, there is not the slightest doubt that when the Debate on the Bill itself comes along, the question of reports to the House with regard to the work of the Corporation can be considered.

Mr. Stephen: Will my right hon. Friend consider having the head office' of the Corporation in Glasgow?

Vice-Admiral Taylor: Can the right hon. Gentleman say whether assistance will be given to enable British shipping companies to undertake the transport of these goods from the Colonies, and to help the transport to be carried out by British ships?

Mr. Creech Jones: The whole problem of transport and communications is one to which a development corporation must give its attention. It is no good producing things if they cannot be brought away from a country.

Vice-Admiral Taylor: In British ships.

Mr. Speaker: We have not yet even started the Corporation.

Mr. Stokes: Will my right hon. Friend particularly call the attention of the Corporation to the value of the natural resources of the Dead Sea salts which, in 1923, were valued at no less than £240,000 million?

BUSINESS OF THE HOUSE

Motion made, and Question put,
That the Proceedings on Government business be exempted, at this day's Sitting,

from the provisions of the Standing Order (Sittings of the house).—[Mr. H. Morrison.]

The House divided: Ayes, 282; Noes, 109.

Division No. 283.]
AYES.
[3.43 p.m.


Adams, W. T. (Hammersmith, South)
Foot, M. M.
McGhee, H G.


Alpass, J. H.
Fraser, T. (Hamilton)
Mack, J. D


Anderson, F. (Whitehaven)
Freeman, Peter (Newport)
McKay, J (Wallsend)


Attlee, Rt. Hon. C. R.
Gaitskell, H. T. N.
Mackay, R. W. G. (Hull, N.W.)


Austin, H. Lewis
Gallacher, W.
McKinlay, A S.


Awbery, S. S.
Ganley, Mrs. C. S.
Maclean, N (Govan)


Ayles, W. H.
George, Lady M. Lloyd (Anglesey)
McLeavy, F


Ayrton Gould, Mrs. B
Gibbins, J.
Macpherson, T. (Romford)


Bacon, Miss A
Gibson, C. W
Mainwaring, W. H.


Balfour, A.
Gilzean, A.
Mallalieu, J P W.


Barstow, P. G.
Glanville, J. E. (Consett)
Mann, Mrs. J.


Barton, C.
Gordon-Walker, P. C.
Manning, C. (Camberwell, N.)


Battley, J. R.
Greenwood, Rt. Hon. A. (Wakefield)
Manning, Mrs. L. (Epping)


Beattie, J. (Belfast, W.)
Greenwood, A. W. J. (Heywood)
Mathers, G.


Bechervaise, A. E.
Grenfell, D. R.
Medland, H. M


Belcher, J W
Grey, C. F.
Mellish, R. J


Benson, G
Grierson, E.
Middleton, Mrs. L


Perry, H.
Griffiths, D. (Rother Valley)
Mikardo, Ian


Beswick, F
Griffiths, W. D, (Moss Side)
Mitchison, G R


Binns, J
Guest, Dr. L. Haden
Monslow, W.


Blenkinsop, A.
Gunter, R. J.
Morgan, Dr. H. B.


Blyton, W. R.
Guy, W. H.
Morley, R.


Bottomley, A. G.
Haire, John E. (Wycombe)
Morris, Lt.-Col. H (Sheffield, C)


Bowden, Flg.-Offr. H. W.
Hale, Leslie
Morris, P (Swansea, W.)


Bowles, F. G. (Nuneaton)
Hall, W. [...].
Morris, Hopkin (Carmarthen)


Braddock, Mrs. E M. (L'pl. Exch'ge)
Hamilton, Lieut.-Col. R
Morrison, Rt. Hon H (Lewisham, E.)


Bramall, E. A.
Hardman, D R.
Moyle, A.


Brook, D (Halifax)
Hardy, E A.
Nally, W.


Brooks, T J. (Rothwell)
Harrison, J.
Naylor, T, E.


Brown, George (Belper)
Hastings, Dr. Somerville
Neal, H. (Claycross)


Brown, T. J. (Ince)
Henderson, A. (Kingswinford)
Nichol, Mrs M. E. (Bradford, N.)


Bruce, Maj. D. W. T.
Henderson, Joseph (Ardwick)
Nicholls, H. R. (Stratford)


Buchanan, G
Herbison, Miss M
Noel-Baker, Capt. F. E. (Brentford)


Burke, W A
Hewitson, Capt. M
Noel-Baker, Rt. Hon P J. (Derby)


Butler, H. W. (Hackney, S)
Hicks G.
Noel-Buxton, Lady


Carmichael, James
Hobson, C. R.
Oldfield, W H


Castle, Mrs B. A
Holman, P.
Oliver, G. H


Champion, A J.
Holmes, H. E. (Hemsworth)
Paget, R. T


Chetwynd, G. R
Hcuse, G
Paling, Rt. Hon. Wilfred (Wentworth)


Cluse, W S.
Hoy, J.
Paling, Will T (Dewsbury)


Cocks, F S
Hubbard, T.
Palmer, A. M. F.


Collindridge, F.
Hudson, J. H. (Ealing, W.)
Parker, J.


Collins, V. J.
Hughes, Hector (Aberdeen, N.)
Parkin, B. T


Colman, Miss G. M.
Hughes, H. D. (Wolverhampton, W.)
Paton, J. (Norwich)


Comyns, Dr L
Hynd, H. (Hackney, C.)
Pearson, A.


Corlett, Dr. J
Janner, B.
Peart, Thomas F.


Cove, W. G.
Jay, D. P. T.
Piratin, P.


Cunningham P
Jager, G. (Winchester)
Poole, Major Cecil (Lichfield)


Daggar, G
Jeger, Dr S. W (St. Pancras, S.E.)
Popplewell, E


Daines, P
John, W
Porter, G. (Leeds)


Davies, Clement (Montgomery)
Jones, Rt. Hon. A. C (Shipley)
Price, M. Philips


Davies, Edward (Burslem)
Jones, D T (Hartlepools)
Proctor, W. T


Davies, Ernest (Enfield)
Jones, P. Asterley (Hitchin)
Pryde, D. J,


Davies. Harold (Leek)
Keenan, W.
Randall, H E


Davies, Hadyn (St Pancras, S.W.)
Kendall, W. D
Ranger, J


Davies, R. J (Westhoughton)
King, E. M.
Rees-Williams D. R


Deer, G
Kinghorn, Sqn.-Ldr. E
Reeves, J,


de Freitas, Geoffrey
Kinley, J
Reid T (Swindon)


Delargy, H.
Kirby, B. V.
Rhodes, H


Diamond, J
Kirkwood, D
Roberts, Emrys (Merioneth)


Dodds, N. N
Lang, G.
Roberts, Goronwy (Caernarvonshire)


Driberg. T E. N
Lavers, S.
Robertson, J. J (Berwick)


Dugdale J (W Bromwich)
Lee, F (Hulme)
Rogers, G. H. R.


Dempleton, C W
Lee, Miss J (Cannock)
Ross, William (Kilmarnock)


Edelman, M
Leslie, J R.
Royle, C


Edwards, Rt Hon. Sir C (Bedwellty)
Levy, B W
Sargood, R


Edwards, W J (Whitechapel)
Lindgren, G, S
Scollan, T


Evans, E (Lowestoft)
Lindsay, K M. (Comb'd Eng. Univ.)
Scott-Elliot, W


Evans, John (Ogmore)
Lipson, D L.
Segal, Dr S.


Evans, S N (Wednesbury)
Lipton, Lt -Col M
Shackleton. E. A A


Ewart, R
Logan, D G
Sharp, Granville


Fairhurst, F
Longden, F.
Shinwell Rt Hon E


Farthing, W J
Lyne, A W.
Shurmer, P


Fernyhough E
McAdam, W.
Skeffington, A. M


Fletcher, E G. M, (Islington, E.)
McEntee, V. La T.
Skeffington-Lodge, T C




Skinnard, F. W.
Thomas, George (Cardiff)
Westwood, Rt. Hon. J


Smith, C. (Colchester)
Thomson, Rt. Hon. G R. (Ed'b'gh, E.)
White, H. (Derbyshire, N.E.)


Smith, H. N. (Nottingham, S.)
Thorneycroft, Harry (Clayton)
Whiteley, Rt. Hon. W.


Smith, S. H. (Hugh. S.W.)
Tiffany, S. 
Wigg, Col. G. E.


Snow, Capt. J. W.
Timmons, J.
Wilkes, L.


Sorensen, R. W
Titterington. M. F.
Wilkins, W. A.


Sparks, J. A.
Tolley, L.
Willey, F. T. (Sunderland)


Stamford, W.
Vernon, Maj. W. t.
Willey, 0. G. (Cleveland)


Stephen, C.
Wadsworth, G
Williams, J. L. (Kelvingrove)


Stewart, Michael (Fulham, E.)
Walkden, E,
Williams, W. R. (Heston)


Stokes, R. R.
Walker, G. H
Willis, E.


Stress, Dr. B.
Wallace, G. D. (Chislehurst)
Wills, Mrs. E. A.


Summerskill, Dr. Edith
Wallace, H W. (Walthamstow, E.)
Wise, Major F. J.


Swingler, S.
Warbey, W. N.
Woodburn, A.


Symonds, A. L.
Watkins, T. E.
Young, Sir R. (Newton)


Taylor, H. B. (Mansfield)
Watson, W. M.
Younger, Hon. Kenneth


Taylor, R. J. (Morpeth)
Webb, M. (Bradford, C)
Zilliacus, K.


Taylor, Dr. S. (Barnet)
Weitzman, D.



Thomas, D. E. (Aberdare)
Wells P. L. (Faversham)
TELLERS FOR THE AYES:


Thomas, Ivor (Keighley)
West, D. G.
Mr. Simmons and Mr. Hannan.




NOES.


Amory, D. Heathcoat
Gridley, Sir A.
Noble, Comdr. A. H. P.


Anderson, Rt. Hn. Sir J. (Scot. Univ.)
Grimston, R. V.
Osborne, C.


Baldwin, A. E.
Hannon, Sir P. (Moseley)
Pickthorn, K.


Barlow, Sir J.
Hare, Hon. J H. (Woodbridge)
Prescott, Stanley


Baxter, A. B.
Haughton, S. G.
Price-White, Lt.-Col. D.


Beechman, N. A.
Head, Brig. A. H.
Reed, Sir S. (Aylesbury)


Birch, Nigel
Hogg, Hon. Q.
Reid, Rt. Hon. J. S C. (Hillhead)


Boles, Lt.-Col. D. C. (Wells)
Hudson, Rt. Hon. R. S. (Southport)
Roberts, H. (Handsworth)


Boothby, R.
Hurd, A
Roberts, Maj. P. G. (Ecclesall)


Boyd-Carpenter, J. A.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Robinson, Wing-Comdr Roland


Braithwaite, Lt.-Comdr. J. G.
Hutchison, Col. J. R. (Glasgow, C.)
Ropner, Col. L.


Buchan-Hepburn, P. G T.
Jarvis, Sir J
Ross Sir R. D. (Londonderry)


Bullock Capt. M.
Jeffreys, General Sir G
Savory, Prof. D. L.


Butcher, H. W
Keeling, E. H.
Scott, Lord W.


Channon, H.
Lancaster, Col. C. G
Shepherd, W. S. (Bucklow)


Clarke, Col. R. S.
Langford-Holt, J.
Smithers Sir W


Clifton-Brown, Lt.-Col. G.
Law, Rt. Hon. R. K
Spearman, A. C. M.


Conant, Maj, R. J. E.
Lennox-Boyd, A, T.
Spence, H. R.


Cooper-Key, E. M.
Lindsay, M. (Solihull)
Stanley, Rt. Hon O


Corbett, Lieut.-Col. U. (Ludlow)
Low, Brig. A. R. W.
Stoddart-Scott, Col M


Crosthwaite-Eyre, Col. O. E
MacAndrew, Col. Sir C
Studholme, H. G.


Crowder, Capt. John E
McCallum, Maj. D.
Sutcliffe, H.


Cuthbert, W. N.
Macdonald, Sir P (I. of Wight)
Taylor C. S. (Eastbourne)


Davidson, Viscountess
Mackeson, Brig. H. R.
Taylor, Vice-Adm. E A (P'dd'tn, S.)


Digby, S. W
McKie, J. H. (Galloway)
Thornton-Kemsley, C N


Dodds-Parker, A. D.
MacLeod, J.
Tcuche, G. C.


Donner, Sqn.-Ldr. P W
Macpherson, N. (Dumfries)
Vane, W. M. F.


Drayson, G. B.
Maitland, Comdr. J W.
Wakefield, Sir W. W.


Drewe, C.
Marlowe, A. A H.
Walker-Smith, D


Duncan, Rt. Hn. Sir A. (City of Lond.)
Marshall, D. (Bodmin)
Ward, Hon. G. R


Eccles, D. M.
Marshall, S. H (Sutton)
Webbe, Sir H. (Abbey)


Eden, Rt. Hon. A.
Medlicott, F.
Winterton, Rt. Hon Ear)


Elliot, Rt. Hon. Walter
Mencr, Sir J.
York, C.


Fleming, Sqn.-Ldr. E, L
Morris-Jones, Sir H.



Fraser, H. C. P. (Stone)
Morrison, Rt. Hon. W. S. (Cirencester)
TELLERS FOR THE NOES:


Fraser, Sir I (Lonsdale)
Mott-Radclyffe, C. E.
Major Ramsay and


Galbraith, Cmdr T. D
Neven-Spence, Sir B.
Lieut.-Colonel Thorp.


Grant, Lady
Nield, B. (Chester)

Orders of the Day — ELECTRICITY BILL

As amended (in the Standing Committee), further considered.

CLAUSE 43.—(Supply of electricity to railways.)

3.53 p.m.

Colonel Clarke: I beg to move, in page 54, line 27, at the end, to insert:
but so however that taking one year with another the terms and conditions shall be such

as will not result in a financial loss to the Central Authority or the Area Board as the case may be.
This Clause deals with the supply of electric current to railways which, we understand, are about to be nationalised, and I would like, first, to point out what is the present position. Under Section 4 of the Electricity (Supply) Act, 1935, which, of course, is to be repealed by this Bill, it is required that while bulk supplies of electricity from the Central Electricity Board to the railways may be given at special rates, such arrangements must comply with a rule, and that rule


is that they must not result in financial loss to the Central Electricity Board. This Amendment will ensure that that rule remains in force, even though the law is repealed. We feel that in future, in transactions between a nationalised electricity supply and a nationalised railway system, there may be temptation for an unsuccessful transport system to get a hidden subsidy from a successful electricity board. It is essential that the financial success or otherwise of all these nationalised undertakings should be clear to the country. It is not a matter of party politics. Under private enterprise, if a -company fails to act with financial prudence, and if it incurs financial losses, sooner or later it becomes bankrupt. That will not happen with a national monopoly. There is a danger that there will be continual internal financial bleeding, if I may so call it, which will result in the slow debility of the economic state of the country. The principle of this Amendment is already laid down in Section 4 of the Electricity (Supply) Act, 1935, which forbids the Central Electricity Board contracting a supply to any railway company unless they satisfy the electricity commissioners that such supply will not result in financial loss to the Board. I believe this Amendment is' necessary and will be helpful.

Mr. Nigel Birch: I beg to second the Amendment.

The Minister of Fuel and Power (Mr. Shinwell): I am unable to find any point of difference between the Opposition and myself on this issue. As I said during the Committee proceedings, it is not our intention to provide for subsidies, whether concealed or otherwise, but I thought this matter might be arranged by regulation rather than by making a specific stipulation in the Bill. However, as there appears to be no objection to the principle embodied in this Amendment and the succeeding Amendment, if hon. Members will leave the matter with me I will see whether I can find a suitable form of words and arrange the matter in another place. The right hon. Member for Southport (Mr. R. S. Hudson) will observe how anxious I am to make concessions at this early stage in our proceedings today, and no doubt he will respond by assisting me to expedite the proceedings.

Mr. R. S. Hudson: We are obliged to the right hon. Gentleman. I do not think he can complain about the expedition with which we concluded our proceedings in the early hours of this morning. There is one question I would like to ask. There are three Amendments which, to some extent, overlap. They are, the Amendment which we are at present considering, and the Amendments in page 54, line 30, to leave out from "used," to end of line 34, and insert:
also for the lighting of vehicles, but shall not be used for any other purpose:
Provided that, with the consent of the Electricity Commissioners, and subject to such limitations and conditions, if any, as they may prescribe either generally or in any particular case, the electricity supplied under this Section to a railway company at any point may be used partly for such purposes as aforesaid and partly for other purposes of the undertaking of the owners of the railway, being purposes for which such owners are entitled to use electricity, but the Electricity Commissioners shall not in any case give any such consent until notice of the application for the consent has been given by advertisement or otherwise in such manner as the Electricity Commissioners may direct, and an opportunity has been given to any person who appears to the Minister to be affected of making representations thereon";
and in page 55, line 11, at end, insert:
(7) In exercising their functions under this Section the Minister and the Secretary of State shall ensure that Electricity Boards shall not supply electricity to any railway undertaking otherwise than upon terms and conditions designed to ensure that, taking one year with another, such supply shall not have the effect of subsidising the railway undertakings at the expense of other consumers, nor result in a financial loss to any Electricity Board.
I think they all cover a variation of the same idea. I would like to know whether the assurance which the right hon. Gentleman has just given covers all three Amendments, or whether he would prefer to have a short discussion on the other two.

Mr. Shinwell: What I said related to the Amendment which has been moved by the hon. and gallant Member for East Grinstead (Colonel Clarke) and the Amendment to page 55, line 11. The other Amendment, to page 54, line 30, is not so covered

Mr. Hobson: In view of the Minister's statement that his remarks apply also to the Amendment in Page 55'line11 I feel constrained to make one or two observations. I do not


think it is sufficiently realised that while railway companies possess power stations which are not statutory undertakings, regulations have been made by the Electricity Commissioners with regard to the provision and financing of new turbine sets, whereby the frequency has been standardised at 50 cycles as against 33⅓ cycles, and a situation may arise whereby the railway companies can, and do, feed back to the grid. Therefore, it would appear that it might be of advantage to the area boards to give a specially reduced tariff in a given area in order to have a similar agreement with a railway generating station in another area. It is one of the difficulties which are bound to arise, because under the Bill we have excluded all statutory undertakings, irrespective of the fact that they are standardising with regard to frequency. Therefore, I think the Minister is limiting and committing himself to an agreement which, in certain circumstances, will be disadvantageous to the electricity consumer.

Colonel Clarke: In view of the satisfactory assurance that the Minister has given, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

4.0' p.m.

Sir Arnold Gridley: I beg to move, in page 54, line 30, to leave out from "used," to the end of line 34, and to insert:
also for the lighting of vehicles, but shall not be used for any other purpose:
Provided that, with the consent of the Electricity Commissioners, and subject to such limitations and conditions, if any, as they may prescribe either generally or in any particular case, the electricity supplied under this section to a railway company at any point may be used partly for such purposes as aforesaid and partly for other purposes of the undertaking of the owners of the railway, being purposes for which such owners are entitled to use electricity, but the Electricity Commissioners shall not in any case give any such consent until notice of the application for the consent has been given by advertisement or otherwise in such manner as the Electricity Commissioners may direct, and an opportunity has been given to any person who appears to the Minister to be affected of making representations thereon.
Subsection (3) applies to electricity supplied to any railway undertaking for the purpose of haulage or traction, and it states that a supply may be provided on the same' terms and conditions for any

other purpose. I wish to call attention to the width of those words
any other purpose.
In the Standing Committee I pointed out this matter, but I was incorrectly reported in HANSARD as saying that the current might be supplied for 4d. per unit instead of 4d. The difference was in one of those "damned dots" that a famous statesman referred to, and that are capable of creating a great deal of misunderstanding. That price may be satisfactory for traction and haulage purposes, but if the railway undertakers are allowed to use electricity at the same price in their hotels, those hotels will be put into a position of undue preference in competition with thousands of other hotels in this country. That would be most unfair.
It may be said that, under the existing regulations which permit the railways to use the supply for certain purposes, they already have power to use it in their hotels, but we are now dealing with a state of affairs which may shortly result in a great acceleration of railway electrification. We all hope that it might do so and that before many years are past most of the railways will be electrically operated. There will be a far greater number of railway hotels in that case which might be given an unduly cheap supply of electricity, if the provisions of the Subsection were allowed to stand. For that reason the first part of the Amendment proposes to leave out certain words. In order not to make the Subsection too restrictive we add a proviso which widens the possible use of the Clause. The wording of the proviso is precisely similar to the existing provisions of the Clause regarding railway supplies.
I do not consider that the proviso is unreasonable in saying that if supplies are given by the Area Board at 4d. or 5d. per unit, that supply should be allowed to be used in such places as railway workshops, locomotive shops and shunting yards. I would not like to see any restriction of that kind, but that must be left for the suppliers of the current to agree about with the Central Board. In the absence of the Electricity Commission we have worded the proviso so as to leave the position very much as it is to-day. If the Commission are to go, there ought to be some other means of referring provisions to some body which would be able to settle any difference of view as to the


terms and conditions upon which electricity would be supplied for traction purposes, and for any other purpose.

Mr. Bowles: When the hon. Gentleman was referring to the report of his speech in HANSARD, I think he talked about some Labour leader who had spoken about "damned dots."

Lieut.-Colonel Elliot: I think my hon. Friend said "an English statesman."

Mr. Bowles: I thought he said a Labour statesman.

Colonel Clarke: I beg to second the Amendment.

Mr. Hobson: The Amendment would make the situation worse than it is at the moment for traction and lighting. What about the current required for heating and the compressing of brakes? Is it to be measured? Are we to have regulations on such matters as that? When the hon. Member was dealing with special tariff for hotels he qualified it in relation to the provision of electrical energy for railway workshops. Railways already have current there on similar terms as for traction. If we are to make regulations every time, those who profess an abhorrence for regulations, will find the industry saddled with a lot of red tape. So far as special terms are concerned, they are common at all times. It is unfair to read into the Bill that railway hotels are to have some kind of preferential tariff.

Sir A. Gridley: I do not think that the hon. Gentleman can have read the proviso, which leaves it open for the current to be used partly
for such purposes as aforesaid
and partly
for other purposes of the undertaking.

The Solicitor-General (Sir Frank Soskice): In view of the assurance which my right hon. Friend gave a few moments ago I think the hon. Gentleman who moved the Amendment will agree that some, at any rate, of the point of the Amendment is taken away. What remains really is that he would seek to substitute by the Amendment, and in particular by the proviso, the consent of the Electricity Commissioners for the consent of the Central Authority. If the supply is to be used for any other purpose than haulage and traction Subsection (3) lays down that

it must be with the approval of the Central Authority. The hon. Gentleman would say that for "central authority" must be substituted "Electricity Commissioners." That is the effect of the proviso. I agree that it also sets up certain machinery. The long and the short of it is that the hon. Gentleman seeks to change one consenting authority for another. I would join issue with him on that proposal, but before I give reasons for doing so I would say that we think that the words
on the same terms and conditions
should be reconsidered. Both the hon. Gentleman and my hon. Friend, impliedly in what they said, pointed out the restrictive character of those words. We want to look at those words to see whether we cannot give the Central Authority some more discretion with regard to the terms and conditions which it authorises. That, I think, would meet the point made by my hon. Friend.
With regard to the question whether it should be the Central Authority or the Electricity Commissioners, we feel that we must adhere to the position we have taken up. After all, what are the circumstances? The circumstances are that the Central Authority has imposed upon it, under Clause I (1, c) the duty of coordinating the distribution of electricity by area boards, and exercising a general control. Surely, this matter is one which falls plumb within the scope of that duty? Secondly, it is also under a duty, by Clause 1 (6, c), of avoiding any undue preference. My right hon. Friend has said that he does not intend that there should be anything in the nature of a secret subsidy to railways. In addition to that, then, the Central Authority is under a specific duty to see that there is no undue preference shown to any particular type of consumer. Railway companies using current for purposes other than haulage and traction would come within the scope of that provision. Therefore, we think that the appropriate authority in whom to vest the power of giving or refusing consent, or specifying the terms upon which the current may be used for other than haulage or traction purposes, should be, as it is now under the Bill, the Central Authority.
It is, I think, relevant to remember what has been said earlier in cur discussions on this Bill on the question of financing. We are no longer dealing, or


will no longer be dealing when this Bill becomes law, with the position in which one has a number of separate undertakers, each watching out, quite naturally, in order to preserve its own area. We have substituted the area boards; and we have substituted for the principle of individual undertakers the overriding principle that what we are really striving at is to improve the sufficiency of supply to consumers. That is a change; and that does, of course, take away a good deal of the reason for the provisions which the hon. Member for Stockport (Sir A. Gridley) has embodied in this Amendment, and which previously found their place in Section 4 {2) of the Electricity Supply Act, 1935. I would say, in passing, that the hon Member for Stockport was not quite accurate in saying that the wording of that Section was identical with the wording of this Amendment. There is a noticeable difference. Section 4 of that Act prescribed the Minister of Transport as the person who should give consent. The hon. Member has substituted the Electricity Commissioners. However, that is by the way.
As has already been said during our Debates, it is not necessarily thought that the area boards should run, year in and year out, without' any loss, so long as the overall undertaking which is under the control of the Central Authority, taking an overall view of it, balances its budget. Therefore, a good deel of the reason which made it necessary, under Section 4 of the 1935 Act, to set up the rather elaborate machinery which was there set up, has gone. In substituting the Central Authority, charged with the duties in Clause I to which I have referred—that is to say, the duty of exercising an overall co-ordinating control, and the duty of seeing that there is no undue preference extended to any particular consumer—as the authority which is to have the power of giving or refusing consent to the supply of current being used for other than haulage and traction purposes, we feel we have taken the right course.
Therefore, in so far as the Amendment seeks to substitute the Electricity Commissioners for that Authority, we must ask the House to reject the Amendment. But, as I said earlier, we might be able to reconsider the words "on the same

terms and conditions," to meet partly the point made by the hon. Member for Stockport and partly the point made by my hon. Friend, that there should perhaps be some more flexibility, more scope for discretion in the terms upon which the Central Authority could give or withhold its consent to the user by railway companies of current for other than haulage and traction purposes. That is, however, set against the background that my right hon. Friend has said, which has to be considered, that there must be no hidden subsidy veiled in the terms upon which railway companies are allowed to avail themselves of electricity.

4.15 p.m.

Sir A. Gridley: With the consent of the House, perhaps I might put a question to the learned Solicitor-General. I did not, of course, pretend that the Central Authority should decide the terms upon which the railway companies should get their current. If I understand Clause 43(I) correctly, is it not the fact that the Central Authority itself has the duty of providing these supplies to railway undertakings? If that be so—and I think it is—they are to be the suppliers. Surely, they cannot then state the terms of the supply? If there should be any difference between them and the railway undertakings there must be some means of referring the difference to arbitration. It is quite true that in Subsection (2) the terms and conditions for haulage and traction purposes are to be determined by regulations made by the Minister and the Minister of Transport jointly. But, with all respect to those two Ministers, I doubt very much whether they know a sufficient amount about the cost of producing and distributing electricity to be able to decide what are the proper terms to be agreed between them, and I should be very sorry if the two Ministers differed because of that. The point of my question is: Is it not the fact that the Central Authority is responsible for supplying current to railways? That being so, surely they should not be able to decide what the terms should be.

Colonel Clarke: Colonel Clarke rose—

Mr. Speaker: The hon. and gallant Member cannot now speak. He has forfeited his right by seconding the Amendment.

Amendment negatived.

CLAUSE 44.—(Use of heat from generating stations.)

The Solicitor-General: I beg to move, in page 55, line 40, after "manner," to insert:
and subject to 'the like provisions and restrictions.
This is little more than a drafting Amendment. It makes clear that in using power to provide heat from generating stations to be used for buildings, and so on, the boards are to be subject to the same limitations in the exercise of their power as they are for the supply of electricity. For example, they would be bound, as a result of this Amendment, by the provisions of Section 14 of the Electric Lighting (Clauses) Act, 1899, which, provides for certain notices to be given to the Postmaster-General when streets are broken up.

Amendment agreed to.

CLAUSE 45.—(Power to break up streets for certain purposes.)

The Solicitor-General: I beg to move, in page 56, line 22, at the end, to insert:
(2) The powers conferred by this Section shall be exercisable in like manner and subject to the like provisions and restrictions as they are exercisable by the Board concerned for the purpose of the supply of electricity in the area or District of the Board.
This does almost exactly the same as the last Amendment, except that it relates to the case where a board is providing a supply of electricity outside its area. It is to be bound in relation to its activities outside its area in exactly the same way as it would be bound in relation to its activities inside the area.

Amendment agreed to.

CLAUSE 47.—(Machinery for settling terms and ''conditions of employment of staff, etc.)

Mr. Boyd-Carpenter: I beg to move, in page 57, line 6, at the end, to insert:
(2) In carrying out their duties under the last preceding Subsection, the Central Authority shall not refuse to consult with any organisation appearing to represent an appreciable proportion of persons employed by Electricity Boards, or of any class of such persons.
This Amendment seeks to add a new Subsection to Clause 47, which deals generally with the relations between the electricity authorities and their staffs. As

the Bill stands, it is laid down, in Subsection (1), that
it shall be the duty of the Central Authority to seek consultation with any organisation appearing to them to be appropriate with a view to the conclusion between the Authority and that organisation of such agreements as appear to the parties to be desirable.
That is extraordinarily little, because unless an organisation appears to the Central Authority to be appropriate, there is no obligation of any kind upon the Authority to enter into negotiations with them. This Amendment seeks to provide that where an appreciable proportion of persons employed by the boards, or an appreciable proportion of a class of persons employed by the boards, are organised in any particular organisation, it shall be the duty of the Central Authority to discuss and negotiate with them on wages and conditions, and so forth. This is considered desirable because of the situations which have developed in other nationalised and semi-nationalised industries. The hon. Member for Reading (Mr. Mikardo), the day before yesterday, took the line, on an Amendment moved from this side of the House, that it was unnecessary because it sought to deal with a danger which had not yet arisen. That cannot be urged against this Amendment, because this Amendment is designed to prevent the Central Electricity Authority following the example of the Coal Board, by refusing to negotiate with organisations among its employees.
In the case of the Coal Board, as the right hon. Gentleman is only too well aware, he has had, until this morning, a strike on his hands, solely by reason of the refusal of the Coal Board to recognise and discuss conditions with the Administrative and Clerical Workers' Union. The right hon. Gentleman is also well aware of the potentially dangerous situation which is developing by reason of the Coal Board's refusal to recognise and negotiate with the British Association of Colliery Officials and Staff. It is precisely to prevent that same sort of situation developing in this industry that this Amendment has been brought forward. Not only has this situation arisen in the coal industry, but the potentialities of it arising in the electricity industry are even greater.

Mr. Hobson: Can the hon. Member name one organisation of workers or tech-


nicians that has not been recognised by the conciliation machinery which already exists in the electricity undertakings?

Mr. Boyd-Carpenter: The hon. Member is dealing with the present position when the industry is under private enterprise. This Amendment is not designed to deal with that situation, which this Bill seeks to bring to an end. I am inclined to agree with the hon. Member that the situation has not become so bad under private enterprise to warrant this precaution being taken. The object of this Amendment is to deal with the situation when the Central Electricity Authority and its satellite boards are set up. A fair standard to apply is not that of private enterprise, but that of the public monopolies, and, in particular, the public monopoly which comes directly under the responsibilities of the right hon. Gentleman the Minister of Fuel and Power.
I do not know whether the right hon. Gentleman proposes to follow what he did in the case of the coal industry, by putting on this authority representatives associated with the major unions. If he does, he will appreciate that, with the best will in the world, a man who has spent the whole of his life in building up a particular union is not likely to regard the claims of another union very sympathetically. That has certainly been the experience of those unions which are rivals to the National Union of Mine-workers, when having to deal with Mr. Ebby Edwards of the National Coal Board. If it is the intention of the Minister to direct the Central Electricity Authority to continue the happy state of affairs which has existed in the industry under private enterprise, he can have no conceivable objection to accepting this Amendment, because it will only write into the Bill what are precisely his intentions. It is only if that state of affairs, which the hon. Member for North Wembley (Mr. Hobson) has so rightly praised, is brought to an end, that the provisions of this Amendment will take effect. If the hon. Member wants this state of affairs to continue, he can safeguard that by supporting this Amendment.
This Amendment seeks to prevent what is unfortunately happening in the coal industry. It is not a case of any vague or general apprehensions, but a case of very precise apprehensions, based on what

has happened in a neighbouring industry. In the case of electricity, it is even more important to provide this safeguard, owing to the wide variety of unions involved. For example, this Bill provides for the taking over of local authority undertakings. As the hon. Member for North Wembley knows perfectly well, many of the staffs of the local authority undertakings are members of a union connected with local government, rather than of a union connected with the industry. This includes members of the National Association of Local Government Officers, who are very apprehensive about their position in the industry. It lies within the power of the right hon. Gentleman to quieten these apprehensions by accepting this Amendment, and it lies within his power to start off this great experiment in an atmosphere of suspicion and intrigue by refusing to accept it, in which case he will leave us in the unfortunate position of having a repetition of the coal scandal.

Major Peter Roberts: I beg to second the Amendment.
Hon. Members who keep harking back to the labour relations as they have been., should remember that an entirely new principle of nationalisation is being introduced. This is a State monopoly of labour, and where there is a State monopoly of labour the position is entirely different and it is the duty of this House to safeguard all sections. We remember that during the coal Debate this same point was put to the Minister on two or three occasions, but he steadfastly refused to meet us. We are now seeing some of the consequences in other industries. If he persists in his attitude, it will only lead to troubles arising in this industry as in the coal industry.

4.30 p.m.

Mr. Shinwell: If the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) knew anything about the subject of trade union organisation he would never have made a speech to which we have just listened. But, as we know,
A little learning is a dangerous thing.
and that is well illustrated by the hon. Gentleman's speech. The fact is that there is a recognised practice for the purpose of negotiation in the electricity supply industry. What is more, it works very well.

Sir A. Gridley: It works very well today.

Mr. Shinwell: The hon. Member for Stockport (Sir A. Gridley), whose knowledge of electricity supply exceeds by far that possessed by the hon. Member for Kingston-upon-Thames, has just said that it works very well today. Well, if that is so, why disturb it by allowing the creation of a large number of splinter organisations, some of which may be promoted by malicious persons with sinister designs on the new electricity dispensation? The hon. Member for Kingston-upon-Thames said that he was a little surprised—not for the first time, I should imagine—by the words in the Clause, "appear to them," meaning to the Central Authority. I do not know to whom else it would appear, but the body responsible for conducting negotiations on one side. Certainly, it would be highly improper to leave the matter with whom the Central Authority should negotiate to an outside body. That would make confusion worse confounded. What is proposed in the Amendment? It is that we should follow the line laid down in the Coal Industry (Nationalisation) Act, with the exception of the insertion of the word "appreciable" in place of "substantial." That makes a world of difference. I would like someone to define for me what is meant by "appreciable." It might represent a company organisation, or half a dozen persons employed in the industry who decided suddenly, out of the void, for a reason that could not be explained, to create an organisation and then present an ultimatum to the Central Authority. We could not have sabotage of that kind operating under nationalisation, and I do not intend that it should.
Let me summarise the nature of the organisations which prevail in the industry. About 95 per cent. of the technical and manual workers are covered by the following trade unions, which are representative bodies. There is the Electrical Power Engineers' Association, a body which represents the technicians, and rightly so. Their point of view must be considered. There is the Electrical Trades Union. What is wrong with that? It is a recognised organisation. Then there are the Amalgamated Engineering Union, the National Union of Enginemen

and Firemen, the National Union of General and Municipal Workers, and the Transport and General Workers Union. All these are well known and representative trade union organisations. Is it necessary to promote any other kind of organisation than these representative bodies, which are operating on behalf of employees in the industry? I think not. There is, of course, the position of the clerical workers, and that will have to be the subject of negotiation between the parties concerned, including N.A.L.G.O. I would not exclude representations from a representative body of that kind, which is, indeed, a bona fide organisation. That makes a substantial difference.
Reference was made by the hon. Member for Kingston-upon-Thames to little difficulties which have developed in the mining industry. These are no new difficulties. They have existed as long back as I can remember. Groups of persons came together, promoted an organisation, and then sought recognition. While I agree that the minority interest cannot be ignored, either in industry or elsewhere—and to prevent any misunderstanding I say that we have done that by making concessions in this Bill— yet, at the same time, a body which is responsible, for the administration of a great industry or service must have regard to the existence of the largest organisations in the industry which can lay greater claim to speak on behalf of employees than little splinter, infinitesimal, and maybe pettifogging organisations. If difficulties should emerge, and some may from time to time, I leave them to the good sense and high intelligence of the persons I shall appoint after consultation with representative bodies of the organisations in the industry. I have a feeling that they will make a far better job of it than the hon. Member for Kingston-upon-Thames would do if we entrusted the task to him. I ask the House to reject the Amendment.

Mr. R. S. Hudson: The right hon. Gentleman made an appeal earlier today for us to co-operate in expediting procedure on this Bill. He will not expedite procedure if he continues to make speeches of the type he has just made.

Mr. Tiffany: The right hon. Gentleman's side wants to make them all, but take none from this side.

Mr. Hudson: If the Minister trails his coat as he did just now he will get it trodden on, and more time will be taken up in discussing Amendments. The right hon. Gentleman's speech is a typical example of the way in which his mind works. He professes respect for democracy and for the rights of minorities, yet he clearly shows that his idea of free speech is free speech for the majority and prevention of the minority for making its view heard, excepting in so far as he chooses to allow it. The right hon. Gentleman talked about the way in which the Government had respected the rights of minorities in this House. We have had last week and this week, quite apart from the proceedings on other Bills, an example of the way in which he translates that into practice. The Leader of the House admitted, in his absence, that the way the Minister treated this House over the Report stage of this Bill, through his delay in putting down Clauses, was a gross discourtesy not only to the Opposition, but to the House itself, and to you, Mr. Speaker.
I take the strongest exception to the right hon. Gentleman getting up in the middle of a discussion on an Amendment which was being argued reasonably from these benches, and talking in the way he did. Why should the right hon. Gentleman arrogate to himself the right to say, in respect of my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) that
A little learning is a dangerous thing?
During the proceedings on this Bill, both here and upstairs, who has displayed an absence of knowledge of these matters more than the right hon. Gentleman? Look at the number of mistakes in the Bill as originally presented which, as a result of scrutiny by us, with our limited resources, the right hon. Gentleman has had to come to the House to put right. More are to be discussed today. The right hon. Gentleman has Clauses on the Order Paper, which we are to discuss later, which show that he had not the foggiest idea of the complications and problems which would arise when this Bill was originally presented. It is not going to expedite proceedings when the right hon. Gentleman talks in this way, and I would recommend him to mend his ways and exercise a little more courtesy.

Mr. Harold Roberts: I listened with great interest to the speech of the Minister. I think that for the purposes of our discussion one may assume that in his knowledge of these matters he is intellectually superior to the hon. Members who have addressed the House. One may even assume a kind of apostolic succession by means of which those whom he is to call into being—those whom he says "I shall appoint "—will have the same preeminent intellectual powers and knowledge that he has. But the matter really goes rather deeper than the Minister would lead us to think. My knowledge of these matters would not in any way approach that of the Minister, but it was my privilege for several years to be chairman of a joint industrial council in the West Midlands. The trade union side was pretty well represented, but one had the problem that a number of employees desired to be represented by another union. There was a great deal of ill-feeling. That compelled me to think the matter out, and to realise that joint boards, like everything else in human life, may become rigid and ossified.
4.45 p.m.
I came to two conclusions: First that the fundamental right of negotiation on the part of man and his master carries with it the corollary that men must be free to choose their own representatives. Secondly, I came to the conclusion that not without grave impertinence on the part of the employers could they dictate to the other side who should represent them on the J.I.C. Thirdly, I urged the employees' side of the council to enlarge their representation, so that it might fully represent all the employees. I am pleased to say that they met the matter in that broadminded way. It meant criticism and ill-feeling between different unions, but the smaller unions obtained representation, and have gone along very happily since. It is all very well to speak about unions being promoted for sinister reasons—petty little unions, and so forth. That is always the language of the large concerns—the vested interest; the language of the large unions against the small ones. I have heard it many times. When I find an Amendment moved which is designed to ensure that the employing authority shall negotiate with all the people who can have any reasonable claims to negotiate, I deny that it should be dealt


with in the manner in which the Minister is attempting to deal with it this afternoon

Mr. Pickthorn: I should like to remind the Minister of another analogy, which I think he might not unreasonably take into account. The difficulties and mischief which are feared on this side of the House are not something hypothetical or something that has never happened before. They do occur where you get Governmental influence or control over all or most of a particular kind of activity; it does occur—and I am sure that the right hon. Gentleman who is in charge of the Ministry of Education will confirm mc on consultation that it does occur there—that for want of representation of some associations there are discontents and that arises from a machinery necessarily exclusive where excessive deference is paid to the administrative convenience of dealing, if possible, with

one organisation only or at any rate, with a few large organisations; the mischief arises particularly when it comes to matters of fixing salary and remuneration as in the Burnham Committees, and so forth. Considerable harm does result, and very great harm is felt to result; we are very often told from the other side when things of this sort are discussed, that it all boils down in the end to the human problem, the problem of human relations; and if they really want this kind of legislation to be a success they really must not take what seems to be at first sight the simple easy administrative line because the doubts and frictions thus set up will ruin their pet projects in a not very long run.

Question put, "That those words be there inserted"

The House divided: Ayes, 112; Noes, 271

Division No. 284.]
AYES
[4.45 p.m.


Amory, D. Heathcoat
Grimston, R. V.
Noble, Comdr A. H. P


Assheton, Rt. Hon. R
Hannon, Sir P. (Moseley)
Csborne, C


Baldwin, A. E
Hare, Hon J H (Woodbridge)
Peto, Brig C. H. M.


Barlow, Sir J
Haughton, S. G
Pickthorn, K.


Baxter, A. B.
Head, Brig A. H
Ponsonby, Col. C. E.


Beechman, N. A
Headlam, Lieut.-Col Rt. Hon. Sir C
Price-White, Lt.-Col D.


Bennett, Sir P
Hollis, M. C
Raikes, H V


Boles, Lt.-Col, D. C. (Wells)
Hudson, Rt. Hon. R. S (Southport)
Ramsay, Maj. S


Bossom, A. C
Hurd, A.
Reed, Sir S (Aylesbury)


Bower, N
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Reid, Rt Hon. J S. C. (Hillhead)


Boyd-Carpenter, J. A.
Jarvis, Sir G
Roberts, H (Handsworth)


Braithwaite, Lt.-Comdr. J. G.
Jeffreys, General Sir G
Roberts, Maj. P G (Ecclesalt)


Bromley-Davenport, Lt.-Col W
Keeling, EH
Robinson, Wing-Comdr Roland


Buchan-Hepburn, P G T
Lancaster, Col. C. G
Ropner, Col L


Bullock, Capt M
LaW, Rt Hon R K
Ross, Sir R D. (Londonderry)


Butcher, H W
Legge-Bourke, Maj E. A. H
Savory, Prof. D L.


Clarke, Col. R. S
Lindsay, M (Solihull)
Scott, Loro W.


Clifton-Brown, Lt.-Col. G
Low, Brig A. R. W
Smiles, Lt.-Col. Sir W


Cooper-Key, E M
MacAndrew, Col. Sir C
Smith, E P (Ashford)


Crosthwaite-Eyre, Col. O E
McCallum, Maj. D
Smithers Sir W


Crowder, Capt. John E
Macdonald, Sir P (I of Wight)
Spearman, A. C M


Cuthbert, W. N
Mackeson, Brig. H. R.
Spence, H R.


Davidson, Viscountes
McKie, J H. (Galloway)
Stanley, Rt Hon. O


Digby, S. W
Maclay, Hon J. S
Stewart, J Henderson (Fife, E.)


Dodds-Parker, A. D.
MacLeod, J
Stoddart-Scott, Col M


Donner Sqn.-Ldr. P W
Macpherson, N (Dumfries)
Studholme, H G




Sucliffe, H


Drayson, G. B
Maitland, Comdr. J. W.
Taylor C. S (Eastbourne)


Drewe, C.
Manningham-Buller, R. E
Taylor Vice-Adm E A. (P'dd't'n, S.)


Duncan, Rt. Hn Sir A (City of Lond)
Marlowe, A A H
Thornton-Kemslev C. N


Eccles, D. M.
Marshall, D (Bodmin)
Tcuche, G. C


Eden, Rt Hon. A.
Marshall, S. H (Sutton)
Wakefield, Sir W. W


Elliot, Rt. Hon. Walter
Medlicott, F
Ward, Hon. G. R


Fleming, Sqn.-Ldr, E L
Mellor, Sir J
Webbe, Sir H (Abbey)


Fraser, H C. P (Stone)
Morris-Jones, Sir H
Winterton, Rt Hon Earl


Galbraith, Cmdr T. D
Morrison, Rt Hon. W S. (Cirencester)
York, C


George, Maj. Rt. Hn. G Lloyd (P'ke)
Mott-Radclyffe, C. E.



Grant, Lady
Neven-Spence, Sir B
TELLERS FOR THE AYES:


Gridley, Sir A
Nield, B. (Chester)
Major Conant and




Lieut.-Coroner Thorp.




NOES.


Adams, Richard (Batham)
Ayles, W. H.
Barton, C.


Adams, W T. (Hammersmith, South)
Ayrton Gould, Mrs. B
Battley, J. R.


Alpass, J. H
Bacon, Miss A
Bechervaise. A E.


Anderson, F. (Whitehaven)
Balfour, A.
Benson, G.


Austin, H. Lewis
Barnes, Rt Hon A. J
Berry, H.


Awbery, S S.
Barstow, P. G.
Beswick, F




Blyton, W. R.
Holman, P
Proctor, W. T


Bottomley, A. G.
Holmes, H E. (Hemsworth)
Pryde, D J


Bowles, F. G (Nuneaton)
Hoy, J.
Pursey, Cmdr. H.


Braddock, Mrs E M. (L'pl. Exch'ge)
Hubbard, I
Randall, H E


Braddock, T. (Mitcham)
Hudson, J. H. (Ealing, W.)
Ranger, J.


Brook, D. (Halifax)
Hughes., Hector (Aberdeen, N.)
Rees-Williams, D. k


Brooks, T J. (Rothwell)
Hughes, H. J (Wolverhampton, W.)
Reeves, J.


Brown, T. J. (Ince)
Hynd, H. (Hackney, C.)
Reid T (Swindon)


Bruce, Maj. D. W T.
Janner, B.
Rhodes, H


Buchanan, G.
Jay, D. P T
Ridealgh, Mrs. M.


Butler, H. W. (Hackney, S)
Jeger, G (Winchester)
Roberts, Emrys (Merioneth)


Callaghan, James
Jeger, Dr. S. W (St. Pancras, S.E.)
Roberts, Goronwy (Caernarvonshire)


Carmichael, James
John, W
Robertson, J. J (Berwick)


Castle, Mrs. B. A.
Jones, Rt. Hon. A. C. (Shipley)
Rogers, G. H. R


Chamberlain, R. A
Jones, D T. (Hartlepools)
Ross, William (Kilmarnock)


Champion, A J.
Jones, P Asterley (Hitchin)
Royle, C.


Chetwynd, G. R.
Keenan, W.
Sargood, R.


Cluse, W. S.
Kendall, W. D.
Scollan, T.


Cobb, F. A.
King, E M.
Scott-Elliot, W.


Cocks, F. S.
Kinghorn, Sqn.-Ldr. E.
Segal, Dr S.




Shackleton, E. A. A


Collindridge, F.
Kinley, J.





Sharp, Granville


Collins, V. J.
Kirby, B V.





Shinwell Rt Hon. E


Colman, Miss G. M
Kirkwood. D.
Shurmer, P.


Comyns, Dr. L.
Lavers, S
sImmons, C. J.


Corlett, Dr. J.
Lee, F. (Hulme)
Skeffington, A. M.


Cove, W. G.
Lee, Miss J (Cannock)
Skeffington-Lodge, T. C


Crawley, A.
Leslie, J R.
Skinnard, F. W


Daggar, G.
Levy, B. W
Smith, C. (Colchester)


Davies, Edward (Burslem)
Lewis, A. W J. (Upton)
Smith, H. N. (Nottingham, S.)


Da vies Ernest (Enfield)
Lipson, D. L
Smith, S. H. (Hull S.W.)


Davies, Harold (Leek)
Lipton. Lt Col. M





Snow, Capt. J W


Davies, Hadyn (St Pancras, S.W.)
Logan, D G
Solley, L. J


Davies, R. J (Westhoughton)
Longden, F.
Sorensen, R. W


Davies, S. O (Merthyr)
Lyne, A W
Soskice, Maj. Sir F


Deer, G.
McAdam, W.
Sparks, J. A.


de Freitas, Geoffrey
McEntee, V. La T.
Stamford, W.


Delargy, H. J.
McGhee, H. G
Stephen, C.


Dodds, N N.
Mack, J D.
Stokes, R. R,


Driberg, T E. N.
McKay, J (Wallsend)
Stross, Dr. B.


Dugdale, J (W. Bromwich)
Mackay. R. W. G. (Hull, N.W.)
Stubbs, A. E.


Dumpleton, C W.
McKinlay, A. S.
Summerskill, Dr. Edith


Edelman, M.
Maclean, N (Govan)
Swingler, S.


Edwards, Rt Hon. Sir C. (Bedwellty)
McLeavy, F
Sylvester, G. O.


Evans, E. (Lowestoft)
McNeil, Rt Hon. H
Symonds A. L.


Evans, John (Ogmore)
Macpherson, T. (Romford)
Taylor, H. B. (Mansfield)


Evans, S. N. (Wednesbury)
Mainwaring, W H
Taylor, R, J (Morpeth)


Ewart, R.
Mallalieu, J. P. W.
Taylor, Dr. S. (Barnet)


Fairhurst, F.
Mann, Mrs. J.
Thomas, D. E (Aberdare)


Farthing, W. J.
Manning, C (Camberwell, N.)
Thomas, Ivor (Keighley)


Fernyhough, E.
Manning, Mrs. L. (Epping)
Thomas, George (Cardiff)


Foot, M M
Mathers, G
Thomson, Rt. Hon. G R. (Ed'b'gh, E.)


Forman, J. C.
Medland, H M
Thorneycroft, Harry (Clayton)


Fraser, T (Hamilton)
Mellish, R. J.
T hurtle, Ernest


Freeman, Peter (Newport)
Middleton, Mrs. L
Tiffany, S.


Gaitskell, H. T. N
Mitchison, G. R.
Timmons, J.


Gallacher, W.
Monslow, W.
Titterington. M. F


Ganley, Mrs C. S
Morgan, Dr. H. B.
Tolley, L.


Glbbins, J.
Morley, R.
Vernon, Maj. W F


Gibson, C. W
Morris, Lt.-Col. H. (Sheffield, C)
Walkden, E,


Gitzean, A.
Morris, P (Swansea, W.)
Walker, G. H


Glanville, J E. (Consett)
Morris, Hopkin (Carmarthen)
Wallace, G. D. (Chislehurst)


Goodrich, H. E.
Morrison, Rt. Hon. H (Lewisham, E.)
Wallace, H W. (Walthamstow, E.)


Gordon-Walker, P. C.
Moyle, A.
Warbey, W. N.


Grenfell, D. R.
Mulvey, A.
Watkins, T. E.


Grey, C. F.
Murray, J. D.
Watson, W. M.


Grierson, E
Nally, W.
Webb, M. (Bradford, C.)


Griffiths, D (Rother Valley)
Neal, H. (Claycross)
Wells P. L. (Faversham)


Griffiths, W D (Moss Side)
Nichol Mrs M. E (Bradford. N.)
West, D. G.


Gtuffydd, Prof. W J
Nicholls, H R. (Stratford)
White, H. (Derbyshire N.E.)


Guest, Dr L. Haden
Noel-Baker. Capt. F. E (Brentford)
Whiteley, Rt. Hon. W.


Gunter, R. J
Noel-Baker, Rt. Hon P J. (Derby)
Wigg, Col. G E.


Guy, W. H
Noel-Buxton, Lady
Wilkes, L.


Haire, John E. (Wycombe)
Oldfield, W H
Wilkins, W A


Hale, Leslie
Paling, Will T. (Dewsbury)
Willey, O. G. (Cleveland)


Hall, W. G
Palmer, A. M. F.
Williams, J. L. (Kelvingrove)


Hamilton, Lieut.-Col. R.
Parker, J.
Williams, W R. (Heston)


Hannan, W (Maryhill)
Parkin, B. T
Willis, E.


Hardy, E. A.
Paton, J. (Norwich)
Wills, Mrs E. A


Harrison, J
Pearson, A.
Wise, Major F, J


Hasings, Dr. Somerville
Peart, Thomas F.
Woodburn, A.


Henderson, Joseph (Ardwick)
Piratin, P
Young, Sir R. (Newton)


Herbison, Miss M.
Poole, Major Cecil (Lichfield)
Younger, Hon. Kennet


Hewitson, Capt. M
Popplewell, E.



Hicks, O
Porter, G. (Leeds)
TELLERS SOB THE NOES:


Hobson, C. R.
Price, M. Philips
Mr. Michael Stewart and




Mr. Daines.

CLAUSE 48.—(Provisions as to pension rights.)

Lieut.-Colonel Elliot: I beg to move, in page 58, line 4, to leave out from the beginning, to the end of line 14, and to insert:
(2) In the case of persons, whether taken into the employment of an Electricity Board or not, who have been members of the Central Electricity Board or were before the vesting date regularly employed in or about any undertaking or part of an undertaking or other business vested in any Electricity Board by or under this Act, the regulations to be made for the purposes of the preceding Subsection shall be so framed as to secure that where either—

(a) a right to or expectation of accruer (whether as of right or under customary practice) of, any particular benefits in favour or in respect of any such person ceases or is prejudiced by reason of hisce asing in consequence of the passing of this Act to be employed by his previous employer, or
(b) any such person has retired from employment as aforesaid before the vesting date and he or another person by reference to his employment has been in receipt of benefits granted in respect of his employment whether as of right or under customary practice,
the same benefits or substituted benefits not less advantageous shall be provided for under the regulations.
This is the first of our compensation Amendments, and it seems reasonable to us that the safeguards they provide should be inserted. The whole position of persons who have been taken into employment or whose employment is altered under the conditions of this Bill is rather obscure. The action of the Minister is to sweep away the previous safeguards and replace them by undertakings. We think it is desirable to extend the scope of the Clause to cover all persons who have a right to or an expectation of a pension and persons who were regularly employed in the undertakings which are taken over. The Bill, as I understand it, covers only those who were employed full time. We had this discussion last night on a different set of individuals —the directors—but I should, not think the Minister will desire to extend the principle which he asserted in the case of directors to cover part-time employees who have also lost their employment or have been otherwise affected by law through the action of this House. It seems reasonable that they should be compensated.
I have had experience of this in many spheres before in Bills which this House has put through, mostly dealing with public employment of one kind or another, and this House has always accepted the principle that where a person is deprived by Statute of employment, whole-time or part-time, or even the prospect of employment, he has a right to have his case considered. I do not know whether the Minister is able to give us any indication that he can meet us on this point. It seems not, judging from his hostile gestures. There is more than one Minister on the Front Bench, and the learned Solicitor-General seems to be moving his head from left to right in the way which is taken to indicate a negative.

5.0 p.m.

Mr. Shinwell: He did not agree with the right hon. and gallant Member.

Lieut.-Colonel Elliot: I thought he did not agree that he would be able to meet us. I would be only too glad to cut short the discussion. I was trying to get some indication from the Minister whether he might meet us on this point, and I have gathered from the gestures of the Solicitor-General that he would not be able to do so. I find it rather difficult to see why it is thought desirable by the Minister to expand the point to the House, because frankly the Amendment is self-explanatory. I do not think that I could add to it and I do not wish to dilate upon it. The simple proposition set out in our Amendment is reasonable and is well in accord with previous precedents established in the House.

Mr. J. H. Hare: I should like to support the Amendment proposed by my right hon. and gallant Friend the Member for the Scottish Universities (Lieut.-Colonel Elliot), and before we have a reply from the Solicitor-General I should like to concentrate particularly on local government officers who are employed on a whole-time basis by a local authority. As part of their duties they have had large responsibilities in the running of local municipal electrical undertakings. These duties as a result of the Government's action in introducing this Bill are taken away from this particular class of person, and it is almost inevitable that the salaries of local government officers such as town clerks or treasurers in the particular municipality


will be reduced. It is perfectly right for the local authority to do this. But it seems to us quite wrong that the unfortunate individual, as a result of the action of His Majesty's Government, should lose that part of his salary which is being taken away from him through no fault of his own.
I should like to point out to the Minister that, in fact, this principle of compensation to these wholly employed local authority officials is accepted in the National Health Service Act. Section 68 (1, a) states that local authority officers who have been connected with joint hospital boards are, in fact, to be compensated under that Act for positions lost, and all that we are asking this afternoon is that the same procedure should apply to local government officials, who will lose a portion of their salaries as a result of the municipal undertaking being removed from the control of the local authority. That is a reasonable case to put forward, and I do not believe that His Majesty' Government desire to impose any hardship on a worthy section of the Civil Service. I hope, therefore that the Minister will accept the Amendment. I have one further word to say before I sit down. It should be made quite clear that in Committee the Minister said that it was up to the local authority to compensate such officials for any loss of salary that they may suffer. That is obviously not a statement of fact, because I think the Minister must agree with me that no local authority has a right to give compensation unless it receives statutory power from Parliament to do so. I support the Amendment.

The Solicitor-General: This particular Amendment does not directly raise the question of part-time employees, but of whole-time employees. It is true that it substitutes regular employment for whole-time employment, and one criticism I have to make of the terms of the Amendment is that it is very difficult to say what is meant by "regular employment," but that is a question of principle apart Leaving aside that principle, which is raised more directly on subsequent Amendments, we come directly to the issues dealt with by this Amendment and what it seems to do. My answer to it would be this—in point of fact it adds nothing to what is already in the Bill; and

I will endevour to explain why I say that.
Clause 48 (1, a), covers both persons in the employ of boards and persons who have been in the employ of bodies which have been taken over by the boards as well as persons who have retired from those bodies, and, therefore, have not been taken over by the boards. So the same range of people who are covered by the Clause as it stands are covered by the Amendment. How are they treated? If hon. Members will look at the concluding words of the Subsection, they will see that in making regulations the Minister has to frame them in such a way that people having pension rights are not in any worse position by reason of the alteration than they were before. If hon. Members will turn to page 70, they will see that pension rights include the cases purported to be covered by the Amendment, for the Amendment includes rights to which the person concerned is not strictly entitled by law If hon. Members look at line 12 on page 70, they will see that the definition of "pension rights" includes:
any expectation of the accruer of a pension to or in respect of that person under any customary practice.
The Amendment does no more than is already done by the Bill.

Colonel Clarke: Surely the term "whole-time" is the governing word both as to employment and as to the expectation. The object of our Amendment was to expand that to cover those who have not been in full-time employment and who have both employment and expectations.

The Solicitor-General: I am obliged to the hon. and gallant Member for his intervention. I had endeavoured to deal with it by pointing out that the question of principle arises on the subsequent Amendments on the Order Paper, and I was confining myself to what was the basic object of this Amendment. I am not really clear as to what is meant by the words "regular employment." It might be said that those words mean the same as whole-time employment, but whether they do or do not, the principle arises on the later Amendment.

Mr. Hare: On a point of Order. I understand that the later Amendment is not to be called.

Lieut.-Colonel Elliot: I ask for the guidance of the Chair on that matter.

Mr. Deputy-Speaker (Major Milner): Mr. Speaker has decided not to call the next four Amendments. The first is the Amendment in the name of the right hon. Gentleman the Member for Southport (Mr. R. S. Hudson) in page 59, line 25, to leave out from "officers," to "being," in line 29, and insert:
who have been regularly employed in or about the whole or any part of any undertaking or business vested in or transferred by or under this Act.
It is also not proposed to call the Amendment in the name of the hon. Member for Hitchin (Mr. Asterley Jones), in page 59, line 27, after "whole-time" to insert "or part-time." The Amendment in the name of the hon. Member for the Park Division of Sheffield (Mr. Burden)—in page 59, line 35, at end, insert:
(2) The Minister as respects the Central Authority and any Area Board, and the Secretary of State as respects the North of Scotland Board, shall by regulations require the Authority or Board to pay, in such cases and to such extent as may be specified in the regulations, compensation to persons who, immediately before the vesting date,—

(a) devoted the whole of their time to employment by authorised undertakers; and
(b) were employed for at least part of their time for the purposes of any functions which are transferred from the authorised undertakers in consequence of this Act.
and who suffer loss of employment or loss or diminution of emoluments which is attributable to the passing of this Act."—
is not being called; nor is the Amendment on page 59, line 41, at end, insert:
(c) Persons who were on the tenth day of January, nineteen hundred and forty-seven, and immediately before the vesting date, directors of any company to which Part II of this Act applies.

Colonel Clarke: Is it the intention to call the next Amendment, in page 59, line 46, at end, insert:
(3) If within five years after the vesting date—

(a)any existing officer relinquishes his employment on the ground that he has been required to perform duties which are not reasonably comparable to or are an unreasonable addition to those which as an officer of his previous employer he was required to perform; or
(b)the services of any existing officer are dispensed with by an Electricity Board because his services are not required and not on account of misconduct or incapacity to perform such duties as immediately before the vesting date he was performing or might reasonably have been required to perform; or

(c) the emoluments of any existing office: are reduced,
that officer shall unless the contrary be proved be deemed for the purposes of subsection (1) of this section to have suffered loss of employment or loss or diminution of emoluments by reason of the vesting
For the purposes of this subsection the expression 'existing officer' means any person who was on the nineteenth day of November, nineteen hundred and forty-five, and immediately before the vesting date such an officer as is referred to in subsection (1) of this section and whose services are transferred to an Electricity Board by reason of the passing of this Act"?

Mr. Deputy-Speaker: Yes, it is proposed to call that one.

The Solicitor-General: Having disposed of the other facets of the Amendment in so far as part-time employees are concerned, the Government's case is that one has to draw the line somewhere and one feels when one is endeavouring to do justice in this matter that these employees give the whole of their time to the body by which they were employed. There is not really very much one can add upon that. The scheme of this Clause and of the regulations to be made under it are designed to ensure that at any rate those who can be said to have been engaged in the whole-time employ of these bodies are to be entitled. After all, that is a very substantial right of considerable value. They are entitled to be placed in that position not only with regard to those rights which they had as legally enforceable claims, but also in respect of those customary accruals, if I may so call them, to which they would expect to look forward in the normal course at the termination of their service.
That is where we have sought to draw the line. If one goes beyond it and says, "We think that that is too stringent a restriction on the benefit rights," one gets into a very uncharted sea. How far is one to go? Who is to count as a part-time employee? What is to be the minimum qualification which is to rank for pension rights? We feel that it would be very difficult in practice to draw any line which could really work and which would be practicable. For this reason, in imposing the duly on the Minister to give the same pension rights, not only in respect of legally enforceable claims, but also in respect of customary expectations, we have thought that those valuable rights should be confined to persons with regard to whom it can be said that they are or were


whole-time employees of the bodies, or are whole-time employees of the boards which have taken over the undertakings of those bodies. We feel, therefore, that we cannot accept this Amendment even if— which is questionable—the expression "regularly employed" is an apt expression to cover part-time employees. If it is an apt expression, I would only say that it is extremely difficult from the wording to know which part-time employees could be said to be regularly employed and which not. Would it apply to a person who works only on Mondays, for example, or would it mean a person working three days a week? Would a person who does actual work come within the expression? If not, why is there to be any intelligible distinction made between a person who does not work regularly but does perhaps much more in the service of the body concerned than a person who works three days a week? There is no definable line of demarcation you can make if you go beyond the category of employees who have been full-time employees.

5.15 p.m.

Colonel Clarke: I want to clear up what was, I think, a misconception on the part of some hon. Members opposite last night concerning the position of directors. The right hon. Gentleman, in replying to my right hon. Friend the Member for South-port (Mr. R. S. Hudson) on a point about certain part-time directors, said in Standing Committee:
I am advised that directors who have some specific…"—[OFFICIAL REPORT, Standing Committee E, 15th May, 1947; c.1027.]

Mr. Deputy-Speaker: What the hon. and gallant Gentleman is saying would not appear to have any relation to the Amendment at present before the House. He may not now seek to clear up something which happened last night, unless he can relate it to the present Amendment.

Colonel Clarke: I think you will find, Mr. Deputy-Speaker, that this is relevant to the Amendment in page 59, line 41, which, I understood you to say, might be referred to during the present discussion.

Mr. Deputy-Speaker: I am sorry but the Amendment has not been selected and is, therefore, not open to discussion.

Mr. Asterley Jones: I understand that I shall be in Order if I refer during the discussion of the Amendment

now before the House, to the principle of the Amendment to page 59, line 27, which stands in my name. I trust that we have not heard the last word yet from the Solicitor-General on the subject of part-time employees. I am aware that the majority of the employees concerned are only partly engaged on the work of an electricity undertaking, but at the same time it must not be forgotten that there are others who are still employed but who spend only part of their time doing work in connection with the authorised undertakings. In my constituency there is an undertaking known as the First Garden City, Limited. This company, which was established over 40 years ago, is in fact the owner of the garden city of Letch-worth and, besides being the ground landlord of the whole of that garden city and carrying on a number of other undertakings, it is also the authorised undertaker for the electricity works.
This company is proposing to take advantage of a Clause, which I understand the Minister is to move later today, whereby this electricity undertaking may be separated from the First Garden City, Limited, and established as a new, separate undertaking. At present the situation is that in the offices of the First Garden City, Limited, 26 persons are employed, none of whom is fully occupied on the work of the electricity undertaking, although many of them are employed on it for part of their time. It is obvious, for example, that in the accountants' branch, to mention only one, the receipts from the electricity undertaking are dealt with together with those from the various other enterprises in which this company is engaged. I am informed that of those 26 employees five only have nothing to do with electricity; four of them spend three-quarters of their time on electricity and the remainder on other work; five of them spend two-thirds of their time on electricity work, eight of them half their time, and three one-third of their time. When this undertaking is separated from the First Garden City, Limited, there will be two alternatives open to the firm — either to transfer some of these officials to that separate undertaking and to separate their work from the rest, which will give rise to a certain amount of waste, or to maintain the arrangement under which all the employees remain servants of the First Garden City, Limited, but are employed only part-time on the work in question. It


is easy to see that some of these men and women will suffer as the result of the change. Adjustments in duties will be made and, in the words of the Bill, they will undoubtedly
suffer loss of employment or loss or diminution of emoluments or pension rights.
I do not imagine that these arguments apply to many people in this country, but they do to some. It is not confined just to that particular company. I imagine that there will be employees of local authorities also who will be adversely affected if the matter is allowed to stand as at present.

Colonel Lancaster: I am grateful that the Solicitor-General should have given assurances in regard to the matter of pensionable rights, but I should like to deal briefly with this matter of part-time employment. I understand that it is giving rise to a good deal of concern and it is a very real question which requires clarifying. I understand that some undertakings have been in the habit of sharing certain types of minor artisan for their particular technical requirements. Such people as chemists who are employed on test work, and men of that kind, were shared between one or two, or possibly more, undertakings, and, therefore, cannot claim to come under the requirements of the Clause as it is at present drafted, although they have nevertheless been spending the whole of their time employed in the electricity industry as such. As the Clause is drafted, these men would not benefit. I am sure that that is an unjust situation, particularly as a man might have been taken on quite recently. He might have worked no more than a month or so. Nevertheless, he can claim that he has been employed whole-time. As the Solicitor-General said, it might be difficult to find a form of words to cover the cases which in no sense can claim to have been employed whole-time in the industry as a whole. That does not seem to be a real reason why the matter should not be fully considered, or why some formula should not be devised to cover those who might properly claim to have been employed full-time within the industry as a whole, although only part-time in some particular part of it.

Mr. Collins: I support the point of view which has been put forward by my hon. Friend the Member for Hitchin (Mr. Asterley Jones). The present

provisions of the Clause do not fulfil what I feel is the genuine intention, that people who are employed in undertakings, whether whole-time or part-time, shall not suffer either in their employment or otherwise when the undertakings are transferred. There is a danger that many people employed part-time will definitely suffer. We have had a lucid explanation from the Solicitor-General, but I feel that this has only made the position of part-time employees even more obscure. I do not accept the plea which has been put forward that part-time employees in municipal undertakings are likely to be covered by the Severance Clause which is to be proposed later today. Undoubtedly many of those people are employed in a part-time capacity and may become redundant or have their employment affected. It does not seem that their position will be covered by any over-all provision for compensation. There is undoubtedly considerable uneasiness among those people. We cannot afford to run the risk that they may not be provided for. We cannot afford to let them have less than justice, and they may get less than justice unless there is a suitable Amendment or a form of words to cover their cases.

Mr. Shinwell: It is all very well for my hon. Friend to say that it should be comparatively simple to find a form of words to cover what are called part-time employees. It is a matter we find exceedingly difficult. We had an illustration given to us, in connection with electrical composite undertakings, of how difficult it is. There are many variations among part-time workers. We must make a distinction between the apparent part-time worker who is an officer of a local authority and who, as a result of severance of the main electricity undertaking, may lose emoluments. That matter can be easily adjusted. In any event, his position is covered by the provisions relating to the statutory rights of local officers.
The remainder of the cases must be very difficult. I heard of a few cases connected with the Letchworth garden city composite undertaking. A person may be employed in a composite undertaking for an hour each day as a part-time worker. That is the kind of person with whom we are concerned. As a result of severance, he presumably loses what he would normally receive for the hours


worked per day. I should imagine that the part of the undertaking that is left might easily adjust that matter, which should present no difficulty. If we are to be compelled to consider the cases of these part-time workers, we shall find ourselves in a position of great difficulty. All sorts of people will be coming along and saying: "As a result of the severance, I have lost this or that." Burdens will be imposed upon the new Central Authority, but they will have to be borne, not by that authority, but by electricity consumers themselves. We have to safeguard ourselves against a position of that kind.
We have taken every precaution that I can see in order to ensure that persons generally employed, and who are regarded as employees of an electricity undertaking, should have their statutory rights preserved, and that pension, superannuation and the like should be providd for them under regulations, which it is my duty to promote when the Bill becomes an Act. That seems to be as far as I can go. I am satisfied that if I proceeded further than that it would create a position of great complexity. It may be that in severance of these composite undertakings some kind of financial adjustment can be made. I imagine that the Central Authority can deal with a matter of that sort without any provision being made in the Bill. It is a consenting financial authority. If certain adjustments were required to be made, that could be done. To ask me to provide legislation to protect these part-time workers who are employed very little of their time in the undertaking seems to me to be a new idea in legislation which might be very injurious. I must ask the hon. Gentleman opposite not to press the proposal. In the case of the Amendment to page 15, line 4, which was dealt with so lucidly by the Solicitor-General, I should like to point out the great difficulty of finding a definition for regularly employed persons, although we know what is meant by that expression.

Colonel Lancaster: The term "regularly employed" is frequently used in connection with the Electricity Act, 1919. It is not a new term, but it is new in this connection.

Mr. Shinwell: We have covered that point by providing as good a definition as

we can get. It is covered by a provision which hon. Gentlemen opposite wanted to delete from the Clause. It is in Clause 48 (2). I should have thought the position eminently satisfactory. I do not suppose that hon. Gentlemen opposite see any objection to that. As regards the Amendment, I cannot see how it is possible to make provision in any specific fashion. I am afraid that I cannot accept the Amendment.

Commander Galbraith: One of my hon. Friends referred to a case in which men were employed by a number of electricity undertakers. They could not say that they were employed full-time by any one of them. Nevertheless, their full time was spent in electricity undertakings. The right hon. Gentleman did say "generally employed." Will he explain whether those words cover such persons as I have indicated?

Mr. Shinwell: I am giving an offhand reply, but I think I can say that if a person is employed whole-time in a number of undertakings, he would come within the provisions of the Clause. He could not possibly be excluded, because he is employed in the electricity industry whole-time.

5.30 p.m.

Lieut.-Colonel Elliot: It is clear that the House is not happy about the position in which it finds itself. Comments have come from both sides on this point. Indeed, it is not unnatural, because it arises out of the definite pledge which the Minister gave on the point. On that pledge, an Amendment was withdrawn in Committee. The Minister of Fuel and Power said:
Some reference is made in some Amendments to part-time employees. I doubt very much whether it would be possible to bring them within the scope of this provision, but we will do our best to find a suitable form of words, and perhaps that will meet the point.
My hon. Friend the Member for Wavertree (Mr. Raikes) said:
In view of what the right hon. Gentleman has said, I beg to ask leave to withdraw the Amendment."—[OFFICIAL REPORT, Standing Committee E, 15th May, 1947; c. 1018.]
That is a very definite undertaking by the Minister. It is true that in earlier stages of the discussion the Minister—

Mr. Shinwell: I am sorry, but the right hon. and gallant Gentleman cannot get away with this.

Lieut.-Colonel Elliot: The Minister must restrain himself for a minute.

Mr. Shinwell: There is not much point in the right hon. and gallant Gentleman quoting me without doing so adequately.

Lieut.-Colonel Elliot: Believe me I have no intention whatever of misrepresenting the Minister of Fuel and Power. It will be seen in HANSARD. I was just about to say that while it is true that in an earlier stage the Minister had shown himself adverse to the position of part-time employees—and I was about to quote what he said—he said earlier in the same column:
It may be that the term 'full-time' is not adequate for the purpose, but 'regularly employed' would open the door to all sorts of categories of a part-time character, which might create difficulties…
Then he went on to say:
I want to make it quite clear that we could not, so far as I can foresee, agree to provide for part-time employees, whatever that may mean.
Then he said, in these concluding words which I have quoted:
Some reference is made in some Amendments to part-time employees. I doubt very much whether it would be possible to bring them within the scope of this provision, but we will do our best to find a suitable form of words, and perhaps that will meet the point."—[OFFICIAL REPORT, Standing Committee E, 15th May, 1947; c. 1018.]
I contend that I am not in any way misrepresenting the Minister. At an earlier stage of his speech he turned his face against the part-time employees but seemed to modify, his opinion as his speech proceeded, and when, in his concluding words, he gives an undertaking to try to meet a certain point and the Amendment is withdrawn, then unless the Minister specifically demurs at that point, it is generally taken that it is in the nature of, I do not say a Parliamentary bargain, but an undertaking to give attention to this point.
The desirability of it has been shown both by the hon. Member for Hitchin (Mr. Asterley Jones) and the hon. Member for Taunton (Mr. Collins), as well as by hon. Members on this side. The Minister says it will be difficult to do that, but the Minister, in taking power to draw a regu-

lation, should not think it impossible for him to ensure that such cases could be considered. He himself says that the number of cases would be small; therefore, that disposes of his other argument that undue burdens might be thrown upon the electricity undertakings by the liability which the House, without distinction of party, seeks to lay upon his shoulders. The fact that only a few people have to be considered is not an argument against taking action. All of us know in our capacity of Members of Parliament that the most irritating thing in the world is to find some person with a perfectly legitimate grievance in our constituency which cannot be remedied because of some Section in an Act of Parliament. The person in question nearly always thinks it is due to the malice aforethought of the Member with whom he or she happens to be in correspondence that the grievance cannot be rectified.
We are only trying to see that this small class of case should not arise. Indeed, the Minister himself says that he has heard of cases in the Welwyn area. It is not a great point, but it is one which other Ministers have to meet. I have had to meet it myself as a Minister framing legislation. An hon. Member behind me said that it has had to be met in this administration by Ministers framing the Health Service Acts. This is not infrequent; it is a puzzling, troublesome and a tedious matter to put it straight, but for all that it is the business of Parliament to put these things straight. If they are not, it is impossible for the Minister to deal with it afterwards by regulations. The Minister has debarred himself from taking any action to meet a class of case which all of us can foresee by the use of the word "whole-time." We suggest that he should not leave that word in the statute and that, if he leaves it in, he, the Minister, and we, the Members, will suffer inconvenience and trouble and, still worse, the lieges for whom we are legislating will suffer. It seems to us, therefore, that a reasonable case has been made out and pressed upon the attention of the Minister from both sides of the House, and it is reasonable that the Minister should correct it now, or should undertake, in the terms of his words upstairs, to give further attention to it between the time when the Bill leaves here and the time when it is under consideration in another place.

Mr. Gallacher: The right hon. and gallant Gentleman said that Members are very worried about this Subsection. I am seriously worried about it and I ask the Minister to consider carefully what he is doing. It says:
The Minister and the Secretary of State jointly shall by regulations require every Electricity Board to pay…compensation to officers, employed whole-time for the purpose of administering the undertaking or any part of the undertaking of any authorised undertakers, being officers who suffer loss of employment or loss or diminution of emoluments…
Why should the Minister put that in a Bill? What we have always stood for when there has been loss of employment or emolument is work or full maintenance until work is provided. Hon. and right hon. Gentlemen opposite will recollect that, when the parish councils were taken over, those officers who lost their employment were compensated in the form of a pension of £300, £400 or £500 a year—£6, £8, or £10 a week. Nobody can dispute that. Any of these men may have got employment and, at the present time, be employed by an electricity undertaking. Now they will lose their employment with that electricity undertaking and their emoluments—does the right hon. and gallant Gentleman question that?

Lieut.-Colonel Elliot: I was engaged in trying to restrain hon. Friends of mine from engaging in altercation. I am most anxious that the hon. Gentleman should conclude his argument undisturbed.

Mr. Gallacher: None of them can question the fact that compensation was paid, and that the people now have pensions of £6, £8, or £10 a week; and there is nothing in connection with the pension to prevent them from taking a full-time or a part-time job with an electricity or any other undertaking. If they lose their employment with an electricity undertaking, are they to get another pension of £300, £400 or £500 per annum? I ask the Minister if we are to be put in that position?

5.45 p.m.

Mr. Shinwell: As regards what my hon. Friend the Member for West Fife (Mr. Gallacher) has said, there is no intention of providing substantial pensions for persons who are transferred and who will occupy positions in the nationalised industry with high salaries, but we have to

preserve the statutory rights of every individual concerned. That is an obligation which we cannot set aside. I have looked again, at Clause 48 and I imagine that provided—and I must emphasise this— provided a suitable formula could be arranged within the regulations—because it is impossible to do it in any other fashion—then Subsection (1, a) of this Clause might enable us to do so. It reads:
for providing pensions to or in respect of persons who are or have been in the employment of an Electricity Board or a Consultative Council, or persons who have been members of the Central Electricity Board"—
I direct attention to these words—
or have been employed by any body to which Part11I of this Act applies or have been employed whole-time for the purpose of administering the undertaking or any part of the undertaking of any authorised undertakers, but who have not been taken into the employment of an Electricity Board as aforesaid;
Let me take the case of a composite undertaking. Part II applies to the transfer of the electricity section of a composite undertaking, and, therefore, an employee of such an undertaking would come within the scope of this provision. That is clear. The remaining question is whether we could find a suitable formula which would cover a person who, while he had been in the employment of an undertaking covered by Part II, had already been partly employed in the other section of the composite undertaking. I am not certain whether it is possible to find such a formula, but we shall do what we can so that no injustice shall be done to anybody. On the other hand, we must not be unjust to the Central Authority. I do not think it is possible to go beyond that, and I am afraid that is my final word

Lieut.-Colonel Elliot: It seems that there was a little misunderstanding about the Minister's previous remarks, so I would like to be quite sure that there is no misunderstanding now. I hope there is no misunderstanding that the right hon. Gentleman is now giving an undertaking that he will look into this.

Mr. Shinwell: No, I am certainly not.

Lieut.-Colonel Elliot: It is desirable that we should get this clear, for nothing could be worse than a suggestion that some misunderstanding which has arisen


has not been cleared up. I understood from the Solicitor-General that he considered that no case of part-time employees could be dealt with under this Bill. Indeed, I understood that from the Minister's remark when he demurred to his final pledge being queried, and stood by his earlier remarks upstairs. Now I understand that the Minister, on examining the Clause, has said that he thinks the case quoted by an hon. Member could be covered under the terms of Subsection (1, a)of Clause 48. Do I carry him with me so far?

Mr. Shinwell: Yes.

Lieut.-Colonel Elliot: He thinks he can do something here by means of regulations, but repeats his caution that he may not find it possible to do anything in the way of regulations? Do I understand that the Minister is now willing to try to do something by regulations in respect of the class of cases which he had previously indicated he could not do anything about; that the Minister is moved in this respect, and is now giving an undertaking to the House that he will try to meet by regulations the class of case pressed upon him by the House which previously he could not deal with? If that is the understanding, then we are all at one.

Mr. Shinwell: In my first speech i indicated how difficult it would be to find a formula. That was my sole difficulty. I have looked at this, and while I still think it would be difficult to find a formula, I will make the attempt when I am dealing with the regulations.

Mr. McKie: I feel sure that my right hon. and gallant Friend the Member for Scottish Universities (Lieut-Colonel Elliot) who showed such laudable concern to protect the hon. Member for West Fife (Mr. Gallacher), will allow me to say that I felt concerned when I heard that hon. Member speaking so earnestly to the Minister—

Mr. Gallacher: There is another provision which deals with pension rights. We are all in favour of pension rights being maintained.

Mr. McKie: I thank the hon. Member for what he has said, but it does not do away with what I felt he tried to impart into the "discussion. In my con-

stituency there is a very large hydroelectric undertaking and I cannot think there is a possibility of cases existing such as the hon. Member for West Fife quoted in connection with the parish councils— which were done away with as long ago as 1929—in which emoluments of £6 a week would be drawn. I was very glad to hear the Minister, if I may use the expression, almost giving the lie direct to what the hon. Member for West Fife said about cases like this, which must be very few and far between, and if the hon. Member does not accept my assurance I hope he will accept the assurance of the right hon. Gentleman.
On behalf of people in my constituency and many employed in such undertakings I join in hoping that the Minister will be as good as his words, and although he rejects the Amendment I hope he will see what he can do under Subsection (1, a) of Clause 48 by way of regulation to assure the future position of these people. We are not trying to make party capital out of this. I do not think those who have been employed part-time so far, when they read the Debate—and there are a larger number of people than ever who read HANSARD now—will be pleased with what the Minister has said. I feel sure they will be impressed by what my right hon. and gallant Friend has said and they will feel that we are concerned, even including the lone voice of the hon. Member for West Fife, although he succeeded in imparting political prejudice into his speech.

Colonel Clarke: In view of the assurance given by the Minister, I beg to ask leave to withdraw the Amendment.

Mr. Deputy-Speaker: The hon. and gallant Member did not move the Amendment and, therefore, cannot ask leave of the House to withdraw it.

Lieut.-Colonel Elliot: In that case I will do so. I beg to ask leave to withdraw the Amendment in consideration of the assurance the Minister has given, although it was of a rather more tenuous nature than I. would like on this occasion, but we are glad that he showed himself so reasonable.

Amendment, by leave, withdrawn.

CLAUSE 49.—(Compensation to officers in connection with transfers.)

Colonel Clarke: I beg to move, in page 59, line 46, at the end, to insert:
3) If within five years after the vesting date—

(a)any existing officer relinquishes his employment on the ground that he has been required to perform duties which are not reasonably comparable to or are an unreasonable addition to those which as an officer of his previous employer he was required to perform; or
(b) the services of any existing officer are dispensed with by an Electricity Board because his services are not required and not on account of misconduct or incapacity to perform such duties as immediately before the vesting date he was performing or might reasonably have been required to perform; or
(c)the emoluments of any existing officer are reduced,
that officer shall unless the contrary be proved be deemed for the purposes of Subsection (1) of this Section to have suffered loss of employment or loss or diminution of emoluments by reason of the vesting.
For the purposes of this Subsection the expression 'existing officer' means any person who was on the nineteenth day of November, nineteen hundred and forty-five, and immediately before the vesting date such an officer as is referred to in Subsection (i) of this Section and whose services are transferred to an Electricity Board by reason of the passing of this Act.
This straightforward and simple Amendment is a simplified substitute for the provisions of the existing law. It will give employees who may be found to be redundant in the first five years after the vesting date, some right of compensation. Although at the beginning of the five years there would not be many cases, as time went on they would be likely to increase. At first there will be a good deal of work in organising these new bodies, but, as time goes on, fewer employees will be needed. Similar provision to this is made in Section 77 of the London Passenger Transport Act, 1\938. Whereas today a redundant employee in the electricity industry can get a job with an alternative company, when the whole industry is nationalised there will be no other possible employment for him, and he will be out of work.

Major P. Roberts: I beg to second the Amendment.
I do so particularly because it puts the onus of proof away from the employee who may be taken out of

employment. I particularly draw the attention of the Minister to the words:
that officer shall, unless the contrary be proved…
Here we are dealing with the monopoly of labour. It is happening in the nationalisation of the coal industry, although I know the Minister does not like it, and I do not think responsible members of the Coal Board like it. Men are being asked to take lesser jobs, and when they demur, they are asked over the telephone, "You are not going to fight the Coal Board, are you?" When there is a monopoly of labour these temptations occur. The Amendment is designed to provide that when the man says, "I will not take that job on" he gets his rights, unless the contrary can be proved. It is a safeguard to the employee.

Mr. Shinwell: I am afraid I cannot accept the Amendment in its existing form, although in principle I take no exception to what is here presented. There are exceptions. For example, I could not tie myself down to a qualifying date or period of service. The principal reason why I cannot accept the Amendment in this form is because I think these provisions are more appropriate to be dealt with by regulations, and provision is made for regulations for this purpose. So I agree, with certain modifications and adjustments which are appropriate to the particular circumstances of this industry, to provide regulations which will cover substantially the proposals contained in the Amendment.

6.0 p.m.

Major P. Roberts: Does that also covet the point of onus of proof, which I mentioned?

Mr. Shinwell: I would not like to say offhand. I would like to look at that, but it appears to me to be quite reasonable.

Mr. R. S. Hudson: May we take it the regulations will substantially meet the points which have been made? I understood the right hon. Gentleman to say that he did not like the words "five years," and did not want to tie himself to that particular period. May we take it that the regulations which he will issue will substantially carry out the terms of this Amendment? The Minister knows better than any one else that when it comes to


a matter of regulations, all we shall be able to do, presumably, will be to move a negative Resolution. We shall not be able to amend them. It is quite conceivable that when the regulations are presented to the House they will, in fact, be generally acceptable but for some one particular item, such as the length of time. I am sure that the Minister would agree that if my hon. and gallant Friend withdraws his Amendment on this understanding, we should have some general idea of what the Minister intends to do, broadly speaking, to carry out the terms of our proposals. I am not asking him to tell us in detail.

Mr. Shinwell: The right hon. Gentleman will understand that it is quite impossible for me to provide at once an alternative form of words. I have said, and I repeat that substantially I accept this proposal. There may require to be modifications. The regulations may be a little better or slightly worse than this, but the principle is accepted.

Mr. Boyd-Carpenter: Does the right hon. Gentleman accept what I think is'the most important part of this Amendment, the transfer of the onus of proof? I do not want to tie him down to any particular details, but I think we are entitled to have an answer to the general question, that an unfortunate person, faced with this great monopoly, shall know that he will not have to establish his case, but that the onus is the other way round

Mr. Shinwell: I have replied to another hon. Member that it is very difficult for me, off-hand, to express an opinion on that. I said that I thought it was reasonable.

Mr. Hobson: I am concerned with the question of compensation for loss of status. I am in agreement with the aim of the Amendment so far as the preservation of salaries is concerned, but I hope that the question of reduction of status is not to be a ground involving compensation. Surely the passing of this Measure does not mean that all the chief engineers will continue to be chief engineers. There is to be some rationalisation, particularly where areas are very small, and there are many small undertakings. I hope that the Minister will not consider that loss of status, the fact that a man is not to be chief of a particular area, is to be a prima facie case for compensation. I

am in agreement with hon. Members opposite so far as preserving the salary and conditions of employment are concerned, but status is a different matter.

Mr. Shinwell: The only assurance I can give is that we shall not go beyond what is reasonable. If there are persons in the industry who have been transferred for one reason or another, and there is a moderate loss of status, provided that the salary remains the same and the person concerned is not worse off financially, that would not appear to me to call for any additional compensation. We expect that the regulations will be framed in a reasonable fashion, and that is what I am prepared to do.

Colonel Clarke: In view of the assurance given by the Minister, particularly that he will go into the question of onus of proof, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Shinwell: I beg to move, in page 60, line 21, to leave out "may," and to insert "shall."
This is moved in order to make the provision mandatory instead of permissive. We had some discussion in the Committee, and I decided accordingly.

Amendment agreed to.

Colonel Clarke: I beg to move, in page 60, line 47, at the end, to insert:
(7) Regulations made under this Section shall be so framed as to secure that no person shall be in any worse position under the regulation than he would have been if the relevant provisions of the Acts repealed by this Act had been re-enacted with any necessary adaptations.
This is a suggested final Subsection to Clause 49. In view of what the Minister said in regard to our previous Amendment, he may favourably consider this one. This is a sort of sweeping-up Clause, based partly on Clause 48 (2). That Subsection begins:
Where provision is made by any such regulations for the amendment, repeal or revocation of any existing pension scheme or of any enactment relating thereto…regulations shall be so framed as to secure that persons having pension rights are not placed in any worse position by reason of the amendment, repeal, revocation, transfer, extinguishment or winding up.
There is today a mass of legislation on this subject, rather long and rather complicated, but it ensures that employees


who become redundant today are compensated, and are not prejudiced, on any reorganisation of electricity undertakings, in regard to their pensions and matters of that sort. I suggest that the words that we are proposing are more definite and more favourable than those in Clause 49.
What is about to happen in the industry? It would be an understatement to call it a reorganisation. It is such a complete upheaval that there is a greater risk of hardship in this direction than previously. A certain clearing up of the legislation is required. Many electricity companies have extremely good pension schemes for their employees at present, and it will be rather hard if, when they came into national employment, they should be worse off than they are at present under private employment.

Colonel Crosthwaite-Eyre: I beg to second the Amendment.

Mr. Shinwell: I hope that hon. Members will not press me to accept this Amendment. As I have indicated, regulations will be provided, but there must be certain modifications of the old practice relating to compensation. We have provisions contained in the London Passenger Transport Board Act, and there are other Acts of Parliament which prescribe what shall be done in cases of this sort when compensation is created thereby. We have to modify these practices in the light of modern conditions, and there has been a change in conditions, for example, full employment, which it is hoped will continue. There are also other factors which must be taken into account.
The best I can do is to say that we take note of this proposal. It is not our desire that the position of any person should be worsened, and, inasmuch as the position of any employee is worsened, that is a factor which will no doubt be taken into account alongside other factors. But the other factors certainly must enter into the calculations of those who are responsible for making the regulations. Therefore, I am afraid that this is an Amendment which takes us rather too far along the road at this stage. Indeed, it is a little premature, because we may have the discussions with appropriate and representative organisations who are concerned in such matters

before we decide definitely on the terms and provisions of the regulations.

Mr. R. S. Hudson: The right hon. Gentleman will realise that, although conditions may have changed, and no one could deny that, the fact remains that over a long period of years a code of compensation practice has been built up. The Minister said a change had come about as a result of full employment. In the case of the younger members of the: staffs, no doubt that is true, but I think anybody who has had any experience of the last year or so will agree that one of the tragedies of the present day situation is that, although there may be nominally full employment and there may be nominally a shortage of manpower to fill the potential jobs, the fact remains that the number of jobs available for the older people, especially for people over 40, definitely is on the decline. I imagine that there is hardly an hon. Member of this House who has not had the experience which I have had of people writing to me and saying that the Ministry of Labour Appointments Bureau have done the best they can but, being over 40, they receive the reply to all the applications they make to firms whose names have been given to them by the local exchange, "The vacancy is not available for people of this age because of difficulties with pensions schemes and so forth."
No one would deny that at present there is a substantial body of people who have served during the major portion of their early and middle age who today are finding it impossible to get a job. To that extent the situation has, if anything, deteriorated compared with what it was 10 or 15 years ago. Therefore, we are concerned about these older people who, while private enterprise and local authority under takings were in existence in large numbers, might have stood a chance of finding some alternative employment in the job for which they were educated and trained and in which they, have spent the major portion of their working lives. Those people will find it even more difficult than it was before to find jobs as a result of the amalgamation and reorganisation that is to take place.

Mr. W. R. Williams: In all the amalgamations which took place after the 1914–18 war, when


large shipping firms and other organisations amalgamated, was it not people of this age who suffered in exactly the same way?

6.15 p.m.

Mr. Hudson: I agree that they suffered, but I do not think that they suffered quite to the extent which the evidence that reaches all of us in all parts of the House leads us to believe today. I suggest that successive Parliaments for the last 30 or 40 years have been impressed with the difficulties. That was increasingly the case during the period which the hon. Member mentioned. Parliament has been at particular pains during all these years to build up a code of compensation practice. The Minister may say he is justified. We will not argue that for the moment. Hon. Members will admit that there is no question but that Clause 49 as drafted is substantially less favourable than the alternative code. We are anxious to see that in any regulations the Minister may make the terms shall be at least as favour able as the code. The mere fact that it is difficult to provide that ought not, in our view, to be a reason for depriving these people of the compensation which, if it had been a matter of the amalgamation of private companies or local authorities, they would have enjoyed. I hope that the Minister will remember that and not ride off with the excuse that conditions have changed.
The right hon. Gentleman said, quite rightly, that these regulations which will have to be drawn up and published, will have to form the subject of discussions with the associations or bodies, whoever they may be, who may be taken to represent the interests of the persons concerned. There is not an hon. Member in any part of the House, still less any hon. Member opposite, who would deny the proposition that these bodies would feel themselves in a very much better negotiating position if they had been fortified with the existence of some Clause such as we suggest, than if they are merely left to the tender mercies of the right hon. Gentleman, however tender some hon. Gentlemen may think they are likely to be. I hope the right hon. Gentleman will bear that in mind when he comes to negotiating with the persons concerned.

Amendment negatived.

CLAUSE; 50.—(Application, amendment and repeal of enactments relating to electricity supply.)

The Solicitor-General: I beg to move, in page 63, line I, to leave out from "Where" to "the," in line 2.
This and the next Amendment go together, and I hope I may be allowed to explain both at the same time. This is a slightly technical Amendment. I think I can summarise it most easily by saying that during the Committee stage criticism was directed against Subsection (6) of Clause 50 on the ground that it was extremely obscure in that it did not say what sort of notice was referred to in the first line of the Subsection. We have sought to meet that simply by excluding reference to the notice. It is not really necessary in the form the Bill now takes, and it makes it clear. It provides that where an undertaking does exist, those enactments which previously applied to it shall not cease to apply to it by virtue of the foregoing Subsection.

Mr. R. S. Hudson: I appreciate that the learned Solicitor-General has tried to improve this Clause. I am advised that it would be improved still more if, in line 8 on page 63, instead of the words:
cease to apply to the undertaking
the words
cease to apply to any undertaking.
were inserted. I confess I am not sufficiently well versed in the law to appreciate that fully, but that is what I am advised. If the Solicitor-General can see his way, perhaps in another place, to have the further slight alteration made, it would improve even more the concession for which we are most grateful.

The Solicitor-General: I am grateful to the right hon. Gentleman for his suggestion which I would like to consider further.

Amendment agreed to.

Further Amendment made:
In page 63, line 2, leave out "authorised undertakers" and insert:
person authorised by any enactment to supply electricity.

CLAUSE 54.—(Provisions as to prosecutions and as to offences by corporations.)

Mr. Deputy-Speaker: Mr. Foster.

Major P. Roberts: On a point of Order. Am I to understand that my


Amendment dealing with decentralisation is not being called?

Mr. Deputy-Speaker: The Amendment in the name of the hon. and gallant Member is not being called.

Major Roberts: May I ask the assistance of the Chair as to whether it would be in Order, on recommittal, to bring up this question, as it has the support of very nearly 95 per cent, of the local authorities in this country, and was not discussed on the Committee stage?

Mr. Deputy-Speaker: No, it will not be in Order.

Mr. R. S. Hudson: Further to that point of Order. When we come to the recommittal, a point will arise. I do not want to get involved in the argument now, because I shall be able to discuss it with whoever is in the Chair at the time. Mr. Speaker told us, I think yesterday or on Monday, that we should have to have a second Report stage in respect of the Clauses and the Amendments that have been recommitted. I merely enter this caveat. We want to know in what position we shall be in regard to our manuscript Amendments, because we have had no opportunity of putting any Amendments for the Report stage on the Order Paper. Presumably, the second Report stage will follow immediately upon recommittal, and the question really arises whether it would be in Order to put down this Amendment as a new Clause, assuming that it is not in Order to move it now, and assuming also that my hon. and gallant Friend desires to move it then. This does raise an important question of principle, which has been put forward by the overwhelming mass of the local authorities.

Mr. Deputy-Speaker: The right hon. Gentleman has put to me a question which he knows is difficult to answer. The Ruling was that this Amendment has not been selected by Mr. Speaker, and therefore cannot be discussed. With regard to the other question asked by the right hon. Gentleman, I have no doubt that he will find another opportunity later on of putting that question.

Mr. Hudson: I only mentioned it, because I thought it would be for the convenience both of the Chair and the House. We realise that we shall have an opportunity to raise the point later on.

Mr. John Foster: I beg to move, in page 65, line 14, to leave out Subsection (2), and to insert:
(2) Where an offence under the last foregoing section or any regulation made under this Act which has been committed by a body corporate is proved to have been committed with the consent or connivance of or to be attributable to any negligence on the part of any director manager or secretary or other officer of the body corporate he as well as the body corporate shall be liable to be proceeded against and punished accordingly.
The Clause deals with the prosecution of directors who were members of a body corporate which had been found to have committed an offence, and the Clause, as it stands, puts a very severe burden of proof on the directors. It states:
(2) Where an offence…has been committed by a body corporate, every person who at the time of the commission of the offence was a director, general manager, secretary or other similar officer of the body corporate, or was purporting to act in any such capacity, shall be deemed to be guilty of that offence unless he proves that the offence was committed without his consent or connivance and that he exercised all such diligence to prevent the commission of the offence as he ought to have exercised having regard to the nature of his functions.
That is a very severe burden of proof, and the object of the Amendment is to make the Clause more in accordance with the ordinary rules of the criminal law and of the law of the land, by making the prosecution prove that the directors acted without due diligence and that they consented or connived. I submit that this would not prevent the proof of offences in those cases where offences had been committed, but it would avoid Injustices where the burden of proof placed on the directors is too high.
As I understand it, the learned Solicitor-General, when moving Clause 54, said that the Clause has precedents in other Statutes besides the Coal Industry Nationalisation Act. I do not know of any, and I would be obliged to him if he would point out to me where this Clause has any precedents. Even if it has precedents in addition to the Coal Industry Nationalisation Act, my submission is still good that it places too great a burden of proof on the directors—and also on officials of the company, because the Clause mentions the general manager, secretary or other similar officer—to prove affirmatively that the company acted without their consent and connivance. It is very difficult to prove a negative, and


very difficult to prove affirmatively the degree of diligence which they should have used.
Whatever case there may be about authority for this Clause, the House will recollect that the exact wording of this Amendment is to be found in the two Insurance Acts passed last year by this House and sponsored by the Government. The exact terms of this Amendment were introduced into both those Acts. I would therefore ask the learned Solicitor-General to point out why it is necessary in this Bill to cast this very severe burden of proof on directors and officials of the company, when it was not done in the two Insurance Acts. I would also ask the Solicitor-General, in view of what has been said by the Minister in connection with the burden of proof, to accept the principle of this Amendment, even if he finds that the wording is not quite correct, though, in my submission, it is correct, because it follows the other Acts of Parliament. I hope he may accept the principle with regard to the onus of proof, and have the matter considered.

Sir A. Gridley: I beg to second the Amendment.

The Solicitor-General: The hon. Gentleman who moved the Amendment asked for a precedent, and also asked why we should place such a severe burden upon directors and upon other officials of the same standing in the same company. In the first place, there is ample precedent, and in the second place, I do not accept that the burden is a severe burden. On the contrary, it is a comparatively light burden. May I take each of those points in turn? There is a whole series of Acts in which, in one form or another, the burden of proof is placed upon the directors to exculpate themselves. Apart from the point about directors, the hon. Gentleman referred to the system of our law. I might mention to him that the Prevention of Corruption Act 1916, Section (2) places a burden upon them to show that they were not guilty. That is a most important Act, but there are other cases in the criminal law in which a defendant is required to show that he is not guilty of the offence with which he is charged, so that it is quite inaccurate to say that it is anything like the universal rule of law that the onus of proof rests upon the prosecution.

Mr. H. Roberts: May I interrupt? I should be very glad, if there is a whole series, of Statutes, as the learned Solicitor-General says, to hear what they are, so that I may look them up at my leisure. I have my doubts.

.30 p.m.

The Solicitor-General: The hon. Gentleman is really unduly suspicious of me. Had he allowed me a few more minutes, I would have stated each and every one on which I rely. I intend to do so now. I have mentioned the Prevention of Corruption Act, 1916, and I will now give a list of the others in sequence. The first one is the Representation of the People Act, 1918. I am taking a series spread over 30 years. Section 34 (4) of that Act as amended by the Representation of the People (No. 2) Act, 1922, says:
Where the person guilty of an offence against this Section is a body of persons corporate or unincorporate, every director or officer of that body shall, unless he proves that the act constituting the offence was committed without his knowledge or consent, be guilty of the like offence.
There are similar provisions in the Dangerous Drugs Act, 1920, Section 13, (2, c)as amended by the Dangerous Drugs Act, 1932. If the hon. Gentleman would like to verify that I am telling the truth, he should look up that Act. The next one is the Dentists Act, 1921, Section 5 (2). The next, the Treaties of Washington Act, 1922, Section 2 (2). Then comes the Theatrical Employers' Registration Act, 1925, Section 6 (3). There is the Betting and Lotteries Act, 1934, Section 29; the Public Health (London) Act, 1936, Section 248 (2); the Public Health Act, 1936, Section 195; the Building Societies Act, 1939, Section 15 (1); Ships and Aircraft (Transfer Restriction) Act, 1939, Section 5; Prices of Goods Act, 1939, Section 18, and then we get to the Coal Act, which was referred to. I am sure the most impartial listener will concede that that is an impressive list.

Mr. Pickthorn: It is very difficult to follow this list. Could the hon. and learned Solicitor-General now give us the time period covered, first, the earliest date, and, second, the Section in the Prevention of Corruption Act which was the first to which he referred?

The Solicitor-General: The earliest time covered was the Prevention of Corruption Act, 1916, Section 2. The first one


after that was 1918, and then I gave a selection spread over many years of administration and ending up in 1939, and then we followed on in 1946. So there is ample precedent. For example in the Prices of Goods Act, the words are:
Unless he proves that the contravention was committed without his consent or connivance and that he exercised all such diligence to prevent the contravention as he ought to have exercised having regard to the nature of his functions as a director or officer of that body and to all the circumstances.
There we have almost an exact precedent for this particular Clause. Is it fair or is it accurate to say that this places a severe burden on directors? It does not really do so at all. Suppose a director in a large company is charged with one particular type of function in the company's life and is concerned with only one particular phase of it. He can perfectly well exculpate himself, supposing an offence is committed which is within the province of other employees or directors of the company. He is let out in the concluding words of the Clause if he can prove that it was committed without his consent or connivance.
Then he has to prove that he exercised all such diligence to prevent the offence, having regard to the nature of his functions in that capacity and all the circumstances. If he can show that he was justified, that other people were doing his job and that he should not have been expected to meddle in the work of his colleagues and other employees of the company, then he escapes the liability of conviction. Therefore, it is really not true to say that it is a severe burden. The hon. Gentleman asked why we put directors under this responsibility. It is because we think that a director who assumes the responsibility which attaches to his appointment should be placed under a certain measure of responsibility to see that the company complies with the law.

Mr. Pickthorn: Is he not under that responsibility already?

The Solicitor-General: Not unless he is placed under it by virtue of a Clause drafted in this form. In general, we say that it is not sufficient that the company alone should be liable to prosecution, and that directors responsible for its activities should be under some measure of responsibility. But we have so phrased the Clause

that if they can show that they have behaved reasonably in the matter—and I think that is a fair summary of what the Clause does—they can escape liability. I submit that it is perfectly fair. It is no less and no more than fair. Therefore, I ask the House to reject this Amendment.

Mr. Boyd-Carpenter: I am sure the House is very interested in the list of Acts containing a similar provision which the researches of the hon. and learned Solicitor-General have brought to light. It would be equally possible to bring out a long list of Acts in which no such provision has been contained. I do not think it is particularly helpful to debate the matter purely on the basis of two conflicting lists. Surely, the hon. and learned Solicitor-General will agree that the onus of establishing innocence should not be placed upon an accused person unless there is some really substantial public necessity for doing so. It is up to any Government putting forward such a proposal to show that the public need really requires some such provision.
In the few minutes since the hon. and learned Solicitor-General gave us the benefit of his researches, I have not had the opportunity to go into the details of the Acts to which he referred, but it is apparent from the names of them that the great majority are Acts dealing with offences which are particularly difficult to prove. That is certainly so in the case of the Prevention of Corruption Act, because there, as the hon. and learned Solicitor-General I am sure will agree, one is dealing with matters the truth of which it is peculiarly difficult to establish. Therefore this House, in 1916, thought fit to transfer the onus of proof. If the basis is that this ought not be done unless compelling reason is shown for doing it, I think the House is entitled to hear a little about what that reason is. The hon. and learned Solicitor-General will recollect that in Committee this matter was discussed. He discussed it, rather on the lines he has done today, on the basis, "Well, it has been done frequently before; therefore, let us do it again." In the twenty-second days proceedings of the Committee, he said:
With regard to the second point, the hon. Member asked for a justification of putting the onus on the directors and persons in the position of directors It is the same justification which has been accepted by the House, for example, in the case of the Coal Act, and in


other Statutes It is not a modern invention at all."—[OFFICIAL REPORT, Standing Committee E, Thursday, 15th May, 1947; c. 1044.]
I submit that that is not good enough. If we are to be asked, for good and compelling public reasons, to transfer the onus, we are entitled to be told what those reasons are. The fact that it has been put into 20 other Acts is no reason for putting it into this Bill. We have not so far been told why it is necessary. The only approach to some such argument came in the concluding passages of the Solicitor-General's speech this afternoon. He said —and I think there was great force in it —that directors have considerable general responsibilities towards their companies from which they should not be allowed easily to escape. That argument might apply if the Clause, as it stands, dealt solely with directors, but it does not. The hon. and learned Gentleman kept referring to directors, but, in fact, the Clause refers to
a director, general manager, secretary or other similar officer.
Therefore, if the Solicitor-General's argument on that point has weight, it has weight only with reference to directors, and it has not anything like the same weight with reference to general managers, still less to secretaries, and even less to similar officers, whoever they may be. The Solicitor-General brushed aside the burden which this Clause puts upon an accused person. The House will appreciate that the accused person must do two things. Once it has been proved that a company has committed an offence, he must prove:
that the offence was committed without his consent or connivance and that he exercised all such diligence to prevent the commission of the offence as he ought to have exercised having regard to the nature of his functions in that capacity and to all the circumstances.
I ask the Solicitor-General, from his considerable experience in the courts, to appreciate that that is a heavy burden to discharge, that it may involve technical difficulties of proof which may be very hard to discharge, and it is not any light burden that he proposes to put upon these people. We have not been given any reason for this provision, except that it has been done before. When a man is brought up on a charge of housebreaking, it is no defence to prove 20 previous offences.

Mr. Basil Nield: The answer advanced by the Solicitor-General to the proposed Amendment was twofold.

He said, first, that there was ample precedent for this sort of Clause, and secondly, that the burden on the accused is not very strict. I wish to say a few words in answer to each of those points. First, as to precedent, my hon. Friend the Member for Northwich (Mr. J. Foster) made it clear that there is ample precedent the other way, and that in many Statutes the onus rests upon the prosecution to prove that a director, or manager, or secretary is guilty of acting knowingly. The Solicitor-General has cited other enactments in which the onus is the other way. Let us, therefore, forget precedents.
With regard to the Solicitor-General's point that the burden is not very strict, I suggest he is disregarding the real question of principle which is here involved. The position, as I understand it, is that if the Clause goes unamended, where a body corporate has committed an offence the secretary may at once be proceeded against, and he is then called upon to prove himself innocent of the offence. That offends against the primary rule in our criminal courts. It is no exaggeration to say that any reputation which our system has throughout the world, has among its first bases this rule, that no man may be convicted unless the prosecution prove that he is guilty. Every time this House invades that general principle, it does something very serious so far as the liberty of the subject is concerned. In this case 1 agree with my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) that no real reasons have been shown why there should be any departure from that vital rule of law which is largely responsible for the reputation which our system of justice possesses.

6.45 p.m.

Mr. H. Roberts: I am sorry the Solicitor-General should think that I am unduly suspicious or that I am challenging his accuracy. Nothing of the kind. My object in asking for a list is this. One has not only to look at a list of Statutes, but to look very carefully into the wording of every Statute to ascertain the reasons which induced Parliament from time to time to frame them in that way. If one looks at the Prevention of Corruption Act, one finds that unless there was a re-enacting Statute the initial reference was wrong. The date of the Prevention of Corruption Act was not


1916 but 1906, and it is notable that it was a very long time before that precedent was followed. Let us hope that the caution which was observed a generation ago will now be repeated.

Sir Peter Bennett: I have studied very carefully the wording of the Clause. I am speaking as an ordinary director of an ordinary company. The hypothetical board meeting to which the Solicitor-General referred does not fit in with my experience of the way in which business is conducted, and if there were trouble or difficulty in my company I would much prefer to have to answer under the proposed new Subsection than the one which it is sought to delete. Today the handling of affairs is very complicated and difficult. Owing to the requirements of the law, directors are called upon to sign many documents, and the only way in which that can be done is by trusting somebody whose business it is to peruse them beforehand. One has to sign them entirely on the trust which one has in one's secretary or legal advisers. It would be much more just if we had the proposed new Subsection.
I would remind the House of a story of a man who had to sign a great many documents. He was let down badly by one of his clerks who said, "I will get the old man to sign a document agreeing to shoot himself within a week," and he did. When a director has to sign a document he says to his secretary whom he has trusted for years. "Is this all right?" and if the secretary says, "Yes," the director signs it. Later on the director may be asked, "Did you sign a document agreeing to do all these things without having read it?" But I can assure the House that if a director were to read all the documents which are put in front of him to sign, he would never do anything else. Therefore, the proposed new Subsection fits in with the practical way in which affairs are carried on more than does the Subsection in the Bill. I support the Amendment because I believe justice would be more likely to be done if it were accepted and that injustice would easily happen under the present Subsection.

Mr. Pickthorn: I hope that even now the Solicitor-General may think it possible to advise his right hon. Friend to

think again about this Amendment. I do not claim to be a lawyer but I have looked hastily at the first of the precedents the Solicitor-General gave us, and I will begin by saying that this surely is precisely the sort of point where a lawyer ought not to rely upon precedent. Where a principle is so strong and so long-established as the principle about the onus of proof in criminal cases, there surely, precedent ought not to be allowed to have any but the very slightest weight, we should surely on each new proposal approach that proposal with a strong prejudice in our minds against it. That is the first point I would raise.
Secondly, with regard to the precedents the Solicitor-General quoted; for all his youth, I should have thought it was not fair for him to tell us that "there is nothing modern about it," and then to adduce precedents none of which go back before 1916. That is not very ancient history. We were already then in the epoch when war and socialism were uncontrollably producing each other and thus whittling down our civil liberties Incidentally, I would not for a moment compete in learning against him but I think there was an older precedent than his oldest. I have a faint recollection of my studies of criminal law and I thought there was a statutory provision shifting the onus of proof against persons found in possession of house-breaking tools after dark—in London and Birmingham, I think; I do not know why Birmingham I think that was the case. I do not quote it, as conclusive, but I hope to show that it is relevant to the argument. Now to come to the first instance which the Solicitor-General quoted, that is, the statute of 1916—and there, he said, was an exact precedent. But the precedent is extremely inexact.

The Solicitor-General: I did not say it was a precedent for this Clause 1 quoted that as an instance of an invasion of what has been described by the hon. Gentleman as a chief principle of English law, that the onus was on the prosecution. It is an exception to that principle. The other cases I quoted were precedents, in one form or another for this Bill.

Mr. Pickthorn: I apologise for any inaccuracy, and I hope that the hon. and learned Gentleman will do me the justice of believing that I had no intention of


over stressing what he said. What he says now is, I think, sufficient for my argument. What he says is that the Statute of 1916 is a precedent, and if not exact at least persuasively close—a precedent for the reversal of onus of proof. That is what he says. I would submit that that is mistaken. It is not at all a close analogy: in Section 2 of the Statute of 1916 a condition precedent is provided to the reversal of the onus, is that there shall have been proof that money has been paid to an employee of the Government by some one seeking a contract. That has to be proved first; the reversal of the onus of proof in that case is on the point whether the purpose was or was not corrupt. But, first of all before that reversal takes place it is necessary for it to be proved, under the Act of 1916 it is necessary for it to be proved, that somebody is seeking a contract with a Government Department and has given money or money's worth to somebody employed in that Government or public body
Now, that is a very different thing from anything that has been suggested here, where the thing to be proved first is a breach by a company of multifarious ministerial regulations, and I do say with proper respect for the Solicitor-General and for his advisers, that it really is not fair to the House that he should have quoted this Section as an analogy without full exposition and warning of the distinction being given to us. It is not only accidental or insignificant that there is a difference. I could not do more than look up one of the Statutes the hon. and learned Gentleman quoted. I think I have fairly given the gist of that one. But if we take the list of the other cases he quoted, I think it would not require very much imagination to guess why this kind of reversal of proof was permitted in connection with these kinds of subjects. Dangerous drugs, for instance were in the list he gave. First of all, nobody deals with dangerous drugs without knowing he is doing something special, that in dealing with dangerous drugs he has a particular responsibility, above what he feels most days. Drugs are things which people are aware have a close potential relation with acts of moral obliquity; and the fact that they are in the possession of A or B, or pass from A to B is strong circumstantial evidence. I am sorry that this argument is long, but I must do my best to make it clear, because I think the

matter is of immense importance, and if I cannot make a clear exposition short, I must put it fully. Drugs are a kind of special category. The same thing is true in the case of theatrical employers, and in the case of betting establishments, and I believe it true also in the case of the earlier Statute, and true of all the cases quoted, that we must be put on extreme caution by the nature of the act or material itself; these are cases where a very strong degree of presumption can be drawn from the circumstances.
If, as in the earliest case, if my learning was right about the house-breaking tools —we find a man at three o'clock in the morning in a back street in Birmingham with a sack full of burglar's tools—there is a strong degree of presumption, and I believe that that has been generally true for each of these reversals of the onus hitherto. I do ask the House—and I should have hardly thought it necessary to ask any lawyer—to agree that even in these cases where the things concerned, where moral obliquity, actual or apprehensible, or where circumstantial evidence elements are strong, even in such cases the House ought to be extremely reluctant o extend this practice. Here we are being asked to extend this transfer of the burden where there is no characterisation by the elements which I have ventured to indicate. It is not only for breaches of the Clause preceding that now before the House that the onus of proof is being shifted, but it is in connection with any kind of delinquency against ministerial regulations under this Bill; and I make bold to say that not many Members of the House realise how immensely wide that category of punishable actions that may be. I do beg the House to believe that unless it can be proved that this is absolutely necessary for the administration of this system, we should insist that it really is an interference with the principles of the English law, and the ordinary liberties of Englishmen, which the House has no justification whatever in permitting to the Government.

Mr. Beechman: Although this discussion has gone on for some time, I feel I ought to take a few moments to say something about this matter, because we are faced with a principle of the utmost moment. Those of us who have taken examinations in criminal law will remember—I am afraid that, as far as I


am concerned, it was some little time ago —and I have no doubt at all that the learned Solicitor-General will well remember, that one of the stock questions to be expected or feared, was, "Name the cases in which the defendant is divested of the protection of the onus of proof in a prosecution." I can recollect that one went on to list, if one had studied one's books, the case of the house-breaking act to which my hon. Friend the Senior Burgess for Cambridge University (Mr. Pickthorn) has referred; and another to which the hon. and learned Gentleman has not referred, the case in which there is a prosecution of somebody for serving liquor to a young person.
These instances were all an innovation quite recently, and they were brought into our law for special protection of the community, so we were taught, in cases where the crime was a very serious one, and where there was a special measure of responsibility; and, finally and most importantly, where it was very difficult for the prosecution to make out its case. Thus, in the case of serving drink to a person under age, it would be very difficult for the prosecution to show that the person serving the drink knew the age of the person who took the drink; and it was very necessary to protect young people from having liquor. In these circumstances I say that the precedents which the hon. and learned Solicitor-General has cited are no precedents at all. They are simply instances of well known exceptions which should not be

followed as precedents if we are to maintain the protection which we have had in regard to personal liberty in this country.

7.0 p.m.

There is yet another clear innovation in this Clause, and it has been referred to by the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). Here the defendant, having lost the protection of the onus of proof, has got to show that he did not consent or connive, and that he took reasonable care. It has never been thought necessary, in my recollection, that one should have to show that one had taken reasonable care in a case where fraud is charged, where it is sufficient to show that one had not been reckless. The result of this will be that a secretary, a manager, or a director, having been given some figures by an accountant, and having perhaps not had the time or the necessary documents to investigate the figures fully, will be told that he has not taken reasonable care, and will be thereby convicted of fraud in a manner which, as far as I know, has never obtained in this country before. I say that the learned Solicitor-General is making history, and bad history at that. History is one of the lew things we can still make without a licence; we give him no licence to rob us of this protecton of our civil liberties.

Question put, "That the words proposed to be left out stand part of the Bill."

The House divided: Ayes, 276;Noes, 111.

Division No. 285.]
AYES.
7.2 p.m


Adams, Richard (Balham)
Bowles, F. G. (Nuneaton)
Cove, W. G.


Adams, W. T. (Hammersmith, South)
Braddock, Mrs. E. M. (L'pl. Exch'ge)
Crossman, R. H. S.


Allen, A. C. (Bosworth)
Braddock, T. (Mitcham)
Daggar, G


Alpass, J. H.
Brook, D (Halifax)
Daines, P.


Anderson, A. (Motherwell)
Brooks, T J (Rothwell)
Davies, Edward (Burslem)


Anderson, F. (Whitehaven)
Brown, George (Belper)
Davies, Ernest (Enfield)


Attewell, H. C.
Brown, T. J (Ince)
Davies, Harold (Leek)


Austin, H. Lewis
Bruce, Maj. D W T
Davies, Hadyn (St. Pancras, S.W.)


Awbery, S. S.
Buchanan, G
Davies, R. J (Westhoughton)


Ayles, W. H.
Burke, W. A
Davies, S. O (Merthyr)


Ayrton Gould, Mrs. B
Carmichael, James
Deer, G.


Bacon, Miss A.
Castle, Mrs B. A
de Freitas, Geoffrey


Balfour, A.
Chamberlain. R. A
Delargy, H. J.


Barstow, P. G.
Champion, A J
Diamond, J.


Battley, J. R.
Chater, D
Dodds, N N


Beattie, J (Belfast, W.)
Chetwynd, G. R
Donovan, T


Bechervaise, A. E
Cluse, W. S
Driberg, T E N


Belcher, J. W
Cobb, F. A.
Dumpleton, C W.


Berson, G
Cocks, F. S.
Durbin, E. F. M


Berry, H.
Collindridge, F.
Edwards, Rt Hon. Sir C. (Bedwellty)


Beswick, F.
Collins, V J.
Edwards, N. (Caerphilly)


Binns, J.
Colman, Miss G. M.
Edwards, W. J (Whitechapel)


Blenkinsop, A.
Comyns, Dr L
Evans, E. (Lowestoft)


Blyton, W. R.
Corlett, Dr. J.
Evans, John (Ogmore)


Bowdon, Flg.-Offr. H. W
Corvedale, Viscount
Evans, S. N. (Wednesbury)




Ewart, R.
McEntee, V. La T.
scollan, I


Fairhurst, F
McGhee, H G
Scott-Elliot, W


Farthing, W. J
McKay, J (Wallsend)
Shackleton, E. A.


Fletcher, E. G. M. (Islington, E.)
Mackay, R. W. G. (Hull, N.W.)
Sharp, Granville


Follick, M.
McKinlay, A S.
Shinwell Rt Hon. E


Foot, M M
Maclean, N (Govan)
Silverman, J. (Erdington)


Forman, J. C.
McLeavy, F
Smmons, C J


Gaitskell, H. T. [...]
Macpherson. T. (Romford)
Skeffington, A. M


Gallacher, W.
Mainwaring, W H
Skinnard, F. W.


Ganley, Mrs C. S
Mallalieu, J P W
Smith, C (Colchester)


Gibbins, J.
Mann, Mrs. J
Smith, H. N (Nottingham, S.)


Gibson, C. W
Manning, C. (Camberwell, N.)
Smith, S. H (Hull S.W.)


Gilzean, A.
Manning, Mrs. L. (Epping)
Snow, Capt J W


Glanville, J. E. (Consett)
Marquand, H A
Solley, L. J


Goodrich, H. E.
Mathers, G.
Sorensen, R. W.


Gordon-Walker, P. C.
Medland, H. M
Soskice, Maj Sir F


Greenwood, A. W. J. (Heywood)
Mellish, R. J
Stamford, W.


Grenfell, D. R
Messer, F.
Steele, T


Grey, C. F.
Middleton, Mrs. L.
Stephen, C.


Grierson, E
Millington, Wing-Comdr. E. R
Stewart, Michael (Fulham, E.)


Griffiths, D. (Rother Valley)
Mitchison, G R
Strauss, G R. (Lambeth, N.)


Griffiths, W D. (Moss Side)
Monslow, W.
Stobbs. A. E


Guy, W H
Moody, A S
Swingler, S.


Haire, John E (Wycombe)
Morgan, Dr. H. B.
Sylvester, G. C


Hale, Leslie
Morley, R.
Symonds A. L.


Hall, W. G.
Morris, Lt.-Col. H. (Sheffield, C.)
Taylor, H B (Mansfield)


Hamilton, Lieut.-Col. R.
Morris, P. (Swansea, W.)
Taylor, R, J. (Morpeth)


Hardy, E. A.
Moyle, A
Taylor, Dr S. (Barnet)


Harrison, J.
Mulvey, A.
Thomas, D E. (Aberdare)


Hastings, Dr. Somerville
Murray, J. D
Thomas, George (Cardiff)


Haworth, J.
Nally, W.
Thomson, Rt Hon. G R. (Ed'b'gh, E.)


Herbison, Miss M
Naylor, T. E.
Thorneycroft, Harry (Clayton)


Hewitson, Capt- M
Neal, H. (Claycross)
Thurtle Ernest


Hicks G
Nichol, Mrs M E. (Bradford, N.)
Tiffany, S


Holman, P.
Nicholls, H. R. (Stratford)
Timmons, J.


Holmes, H E. (Hemsworth)
Noel-Baker, Capt. F E (Brentford)
Titterington, M. P


Hoy, J.
Noel-Buxton, Ladv
Tolley, L.


Hudson, J. H. (Ealing W.)
Cldfield, W. H.
Turner-Samuels, M


Hughes, Hector (Aberdeen, N.)
Oliver, G H.
Vernon, Maj. W F


Hughes, H. D. (Wolverhampton, W.)
Orbach, M.
Viant, S. P.


Hynd, H. (Hackney, C.)
Paling, Rt. Hon. Wilfred (Wentworth)
Walker, G. H


Irving, W. J.
Paling, Will T. (Dewsbury)
Wallace, G. D. (Chislehurst)


Janner, B.
Palmer, A. M F
Wallace, H W. (Walthamstow, E.)


Jeger, G. (Winchester)
Parker, J.
Warbey, W. N.


Jeger, Dr S. W (St. Pancras, S.E.)
Parkin, B T
Watkins, T. E.


John, W
Paton, J. (Norwich)
Watson, W. M.


Jones. D T (Hartlepools)
Pearson, A
Webb, M (Bradford, C.)


Jones, J H. (Bolton)
Peart, Thomas F.
Wells P. L (Faversham)


Jones, P. Asterley (Hitchin)
Piratin, P.
West, D. G.


Keenan, W.
Poole, Major Cecil (Lichfield)
White, H. (Derbyshire, N.E.)




Whiteley, Rt. Hon. W.


King, E. M.
Popplewell, E
Wigg, Col. G E.


Kinghorn, Sqn.-Ldr. E
Porter, G. (Leeds)
Wilkes, L


Kinley, J.
Proctor, W. T
Wilkins, W. A.


Kirby, B V
Pryde, D. J.
Willey, F. T. (Sunderland)


Lang, G.
Pursey, Cmdr. H.
Willey, O G (Cleveland)


Lavers, S.
Randall, H E
Williams, J. L. (Kelvingrove)


Lee, F (Hulme)
Ranger, J
Williams, Rt. Hon. T. (Don Valley)


Leslie, J R.
Rees-Williams, D. Ft
Williams, W. R- (Heston)


Lever, N H
Reeves, J.
Williamson, T.


Levy, B. W
Reid T, (Swindon)
Wills, Mrs. E. A.


Lewis, A. W. J. (Upton)
Rhodes, H
Wyatt, W.


Lindgren, G. S.
Ridealgh, Mrs. M
Yates, V. F.


Lipton, Lt.-Col M
Poberts, Goronwy (Caernarvonshire)
Young, Sir R, (Newton)


Logan, D G
Robertson, J. J (Berwick)
Zilliacus, K.


Longden, F.
Rogers, G. H. R



Lyne, A. W.
Ross, William (Kilmarnock)
TELLERS FOR THE AYES:


McAdam, W.
Royle, C
Mr. Joseph Henderson ano


McAllister, G.
Sargood, R
Mr. Hannan.




NOES.


Amory, D. Heathcoat
Buchan-Hepburn, P G T
Dower, E. L. G. (Caithness)


Assheton, Rt. Hon. R.
Bullock Capt M
Drayson, G. B


Astor, Hon. M.
Butcher, H. W
Drewe, C.


Baldwin, A. E.
Challen, C
Eccles, D, M.


Barlow, Sir J.
Clarke, Col. R. S
Eden, Rt Hon. A.


Beechman, N. A.
Clifton-Brown, Lt.-Col. G.
Elliot, Rt. Hon. Walter


Bennett, Sir P.
Crosthwaite-Eyre, Col O E
Fletcher, W (Bury)


Boies,-Lt.-Col. D, C (Wells
Crowder, Capt. John E
Foster, J. G (Northwich)


Bossom, A. C.
Cuthbert, W N
Fraser, H, C. P. (Stone)


Bower, N.
Davies, Clement (Montgomery)
Fraser, Sir I (Lonsdale)


Boyd-Carpenter, J. A.
Digby, S. W
Fyfe, Rt. Hon. Sir D P M


Bracken, Rt. Hon. Brendan
Dodds-Parker, A. D
Gage, C.


Braithwaite, Lt.-Comdr. J. G
Donner, Sqn.-Ldr. P W
George, Maj Rt. Hn G Lloyd (P'ke)







Gridley, Sir A.
MacLeod, J
Raikes, H V


Gruffydd, Prof. W J
Macmillan, Rt Hon Harold (Bromley)
Reid, Rt Hon. J S C (Hillhead)


Hannon, Sir P. (Moseley)
Macpherson, N. (Dumfries)
Roberts, Emrys (Merioneth)


Haughton, S G
Maitland, Comdr. J W
Roberts, H (Handsworth)


Headlam, Lieut.-Col Rt Hon. Sir C
Marlowe, A. A. H.
Ropner, Co, L


Hogg, Hon Q
Marshall, D (Bodmin)
Ross Sir R D (Londonderry)


 Hollis, M. C.
Marshall, S. H (Sutton)
Scott, Lord W


Hudson, Rt. Hon. R S (Southport)
Mellor, Sir J
Shepherd, W S. (Bucklow)


Hurd, A.
Molson, A H E.
Smiles, Lt.-Col. Sir W


Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Morris, Hopkin (Carmarthen)
Spearman, A. C M


Hutchison, Col. J. R. (Glasgow, C.)
Morris-Jones, Sir H
Spence, H R.


Jarvis, Sir J.
Morrison, Rt Hon W S (Cirencester)
Stanley, Rt. Hon. O


Jeffreys, General Sir G.
Mott-Radclyffe, C E
Studholme, H. G


Kendall, W D.
Neven-Spence, Sir B
Sutcliffe, H.


Lancaster, Col. C G
Nield, B. (Chester)
Taylor C S (Eastbourne)


Langford-Holt, J.
Noble, Comdr. A. H. P.
Thorneycroft, G. E P (Monmouth)


Law, Rt Hon. R. K
Nutting, Anthony
Thornton-Kemsley, C N


Legge-Bourke Maj E. A. H
O Neill, Rt Hon Sir H
Thorp, Lt.-Col. RAF


Lindsay, M (Solihull)
Osborne, C.
Touche, G. C.


Linstead, H N
Peto, Brig. C. H. M.
Wakefield, Sir W. W.


Lipson, D L
Pickthorn, K
White, J B. (Canterbury)


Lucas-Tooth, Sir H
Ponsonby, Col. C. E
Winterton, Rt. Hon. Earl


Lyttelton, Rt. Hon. 0
Prescott, Stanley
York, C


MacAndrew, Col. Sir C
Price-White, Lt.-Col. D,



Macdonald, Sir P (I of Wight)
Prior-Palmer, Brig. O.
TELLERS FOR THE NOES:




Major Conant and Major Ramsay.


Question put, and agreed to.

CLAUSE 56.—(Provisions as to regulations and orders.)

Mr. J. S. C. Reid: I beg to move, in page 66, line 13, to leave out from "regulations," to "and." in line 14.
I think that it would be for the convenience of the House if we discussed together this Amendment and the Amendments, in line 17, to leave out from "provision," to "for," in line 18; and, in line 19, to leave out from "heard," to "of."
The purpose of Clause 56 is to give power to make regulations with regard to the determination of questions of fact and of law. I do not think anyone objects to matters of this kind being put in regulations, provided we are sure that the necessary minima for the proper administration of justice are safeguarded. I have some doubt, when it comes to the third Amendment, whether it is proper to deal with court proceedings in regulations in connection with an electricity Bill. I should have thought that court proceedings ought to be dealt with in the ordinary way by rules of court, and that if it were necessary to make any additions or modifications to what is in any Statute, it ought not to be done by the Minister of Fuel and Power, but by rules of court. I hope, whatever' the Solicitor-General is willing or unwilling to concede, that he will, at least, take out all reference to court proceedings in line 19.
The first point to which we take exception is leaving to regulations the determination of what is or what is not evidence. I see no objection, personally, to

regulations being allowed to admit as evidence something which is not evidence in the strict sense. I am expressing a purely personal view here, when I say that I take the view that the rules of evidence in our courts are perhaps a little bit too strict, and that it would not do much harm if they were slightly relaxed, although that relaxation must be of a very limited character. Any relaxation would come better from some kind of legal body or by rules of court, than from some rules made by the Minister of Fuel and Power. As the relaxation would in any event be somewhat minor, I doubt whether it is worth while introducing that here—I have an open mind about it. I am sure, however, that there ought to be no powers to rule out something that would be evidence under our ordinary rules.
As I understand it, this Clause would allow regulations to exclude something which would otherwise be good legal evidence, and that we must resist. Therefore, I put my case on the first Amendment in this way: there should be no provision in the Bill for excluding legal evidence, but if there were a properly circumscribed and safeguarded provision for the inclusion of something not strictly legal evidence, I would not be seriously disturbed, although, as I have said, I doubt whether this is the way to do it.
7.15 p.m.
I come to the question raised by the second Amendment. The Clause refers to matters relating
to the practice and procedure to be followed in connection with the determination of such questions, including provision as to parties and their representation.


I do not understand what is meant by the provisions as to "parties." Is it intended that the regulations should exclude someone from appearing, although that person would have title and interest under ordinary legal conceptions? If that is intended, it raises a very serious question of principle. I cannot think that the regulations are intended to let in people as parties to these proceedings who do not have title. I cannot understand why that should be done. I am puzzled why the word "parties" is in this Clause at all.
I see the Lord Advocate sitting opposite. It may be that something arises where the Crown ought to be represented. In Scotland, the Lord Advocate has a universal obligation to represent the Crown, but it may be that in England there is not quite the same distinction about the particular person who represents the Crown. If it means that although, under ordinary law, one officer would represent the Crown, but here it would be more convenient for another to do so, that does not raise any question of principle; but if the word "parties" means not the Crown but the subject, whether the subject be a company or a person, I cannot understand why the regulations should include this provision.
I now come to representation. I see no serious objection to extending the class of persons who can represent litigants in the ordinary courts. I do not think it is a good thing. I do not think it is cheaper, or that it shortens the proceedings to allow representation by lay people not so accustomed to presenting cases in court as trained lawyers. As a member of the legal profession, I should not like to appear emphatic on that. If the intention is that someone other than a lawyer should be allowed, in certain classes of cases, to represent the litigants, although I think it is probably unwise, I should not feel bound to object too much. Events would probably show that it was unwise, and the next time this sort of thing came up for discussion it might be said "Look what happened. It did not work very well. It is not a very good thing."
But if the word "representation" here means something more than that, if it means that the regulations will be allowed to prevent lawyers from representing litigants, then it raises a very serious ques-

tion, one which we would have to fight to the uttermost. I know there are cases where legal representation is forbidden, and I think it is a pity. I have a little experience of how these things work, and I believe that, on balance, it is found that in cases where legal representation is forbidden the work does not proceed so smoothly, and justice is not so adequately done. The only possible justification for forbidding legal representation is in a case of such small magnitude that it is thought to be out of scale that a lawyer's fee should be paid. Even there, sometimes much more is involved than the actual sum at stake. But that cannot apply here. On the face of it, this Clause entitles the Minister to say that in a certain class of case a certain type of lawyer shall not be allowed to attend. As this raises a question of principle, I hope the Solicitor-General will agree at least to qualify this wholly unnecessary word. If the intention is that in certain cases a wider range of representation is to be permitted, than would be permitted in a court of law, I think it is unwise but I should not fight to the death on it. But if that is the intention it should be made clear that the narrowing of representation is not permitted to the regulations.
I come to my next and last point, to the words
…for the right to appear and be heard (as well in court proceedings as otherwise)…
I feel sure that these words have got into the Bill under a misapprehension. I cannot believe that it is the intention of the Government, either to say that in court proceedings certain persons who could otherwise appear shall not appear, or that in those proceedings certain persons who would not be qualified to appear shall be qualified for the purpose of these proceedings. I hope that is not the intention, and I shall listen with interest to anything which the Solicitor-General has to say on this matter. I should say that these words are wholly unjustified. Whatever the hon. and learned Gentleman may see fit to do in the way of only partial acceptance of the first two of these Amendments, he ought to accept the third Amendment without qualification.

The Solicitor-General: I want, if I can, to try to meet the right hon. and learned Gentleman's objections and, first, I would like to consider the three phrases to which he has called attention. With regard to


the phrase, "as to the evidence for that purpose," the kind of thing we had in mind was, for example, tendering affidavit evidence of a fact which would otherwise have to be proved by viva voce evidence. The right hon. and learned Gentleman asked whether, within the scope of the words which have been used, it would not be possible for the Government to exclude what would otherwise be relevant evidence, or evidence directly bearing on the issue. Looking at those words, I do not think they are very satisfactory. The sort of words which we think would probably carry out our object more precisely would be "as to the mode of proof," or something of that sort. We would, however, like to consider the present words a little more closely.
With regard to the question of representation and parties, technically, of course, in the case of the courts which are to be set up under the Bill, arbitration courts and so on, if there is no power to enable parties to appear by representatives they would have to appear without representation and state their case. The sort of contingency we had in mind was to enable them to appear by representatives who might be the most suitable in a particular case. Generally, legal representatives would be most suitable, but it occurred to us that in some cases it might be most convenient for all parties to appear by an accountant. In matters dealing with valuation and so on, that might be the most convenient procedure. I do not want to bind myself, at this stage, to any expression of intention, but we desire to take power to enable parties to appear by an accountant if they want to do so, or if it is thought suitable that they should do so in the circumstances of the case.
With regard to the right hon. and learned Gentleman's third point, his criticism of the words is limited to "the right of the Minister or other authorities to appear." The Subsection reads:
…for the right to appear and be heard…
Then there come the words to which he takes exception, followed by
…the Minister or other authorities…
We do not seek to take power to interfere with the right of any other person to be heard. We desire power to enable the Minister, in matters in which he is

directly concerned, to appear and to be heard. With respect to the right hon. and learned Gentleman, I do not think that that is unreasonable. There may be cases in which the Minister's interest is directly affected, and in which he ought to appear. Here, again, we would like to look at the words to see whether they are not going too far, and I ask the right hon. and learned Gentleman not to press me further for an expression of intention as to the exact form the regulations are to take. These words are enabling words. I concede that the first set of words, which relate to evidence, would empower the Minister to do something which he has no desire to do, and which he ought not to have power to do, and as for the other two sets of words we would like to consider what the right hon. and learned Gentleman has said between now and a later stage of the Bill.

Mr. J. S. C. Reid: The Solicitor-General has met the points I raised very fairly, and I would only make this further point about the third Amendment. I am not quite sure whether the hon. and learned Gentleman meant that there was to be power to allow the Minister to appear in a case where, otherwise, the Government would have no right to appear. If he does mean that I would ask him to reconsider the matter, because I have grave doubt about power to allow somebody to appear in court in a case where, according to the ordinary conception of justice, he has no right, title, or interest to appear. I should have thought that that would have applied to Ministers as to other people. I would ask the learned Solicitor-General, if that was what he meant, to think about it again. As he is to re-examine the whole subject, I beg to ask leave to withdraw the Amendment, and I will not proceed to move the following two Amendments on the Paper.

Amendment, by leave, withdrawn.

CLAUSE 59.—(Interpretation.)

7.30 p.m.

The Solicitor-General: I beg to move, in page 68, line 22, at the end, to insert:
'employed' means employed as an officer and 'employment' shall be construed accordingly.
During the Committee stage, attention was drawn to the fact that the definition of an employed person is not in its correct place alphabetically in Clause 59. This


Amendment seeks to take it out of the paragraph which begins with the word "officer," at the bottom of page 69, and to put it definitely in its correct place alphabetically in the list of definitions on page 68.

Amendment agreed to.

The Solicitor-General: I beg to move, in page 69, line 36, after "capital," to insert "and proper provision."
This and the following Amendment— in line 36, to leave out "and obsolescence "—hang together. They are purely consequential on the Amendment to Clause 40 which was considered yesterday.

Colonel Clarke: They may be conseqential, but I think that some comment should be made on them. With regard to the first Amendment—after "capital" to insert "and proper provision "—I agree that that is an' improvement, but it is a matter of opinion as to what the word "proper" means. I cannot help feeling that the Solicitor-General will agree with that. This does call attention to the fact that there is a very real need for some valuation of assets, because this cannot be carried out without some valuation of assets. The Amendment is to insert, after "capital," "and proper provision" and the paragraph reads on: for depreciation and obsolescence." It is impossible to do that unless one knows the value of what one is taking over, which is not known, and the Government, refused to accept our Amendment, which suggested that a valuation should be made in the first two years.

Amendment agreed to.

Further Amendment made: In line 36, to leave out, "and obsolescence."

In line 50, to leave out from "servant," to the end of line 51.— [The Solicitor-General.]

Colonel Clarke: I beg to move, in page 70, line 29, to leave out "stock, debentures and," and to insert "or stock other than."
This is a matter which has been debated before and I do not want to go over old ground, but there is a great difference between hon. Members and right hon. Members on this side of the House and hon. Members and right hon. Members on the other side of the

House as to the distinction between ordinary and preference shares and debentures. On the other side of the House, hon. Members are of the opinion that there is virtually no difference between them. On this side, we believe that there is a very great difference. We believe that debentures are really debts and not in any way the same thing as the equity of a company. I cannot understand the difficulty that there seems to be in distinguishing them. It appears to me to be clear that a debenture is a first charge on the assets of the company. If the company is wound up, the first thing that has to be done is to pay off the debenture holders. They have to be paid off, as a rule, in cash according to the terms in the document that created the charge on the company.
During the Debate upstairs the Parliamentary Secretary said:
We regard debentures as marketable securities, dealt with and quoted on the Stock Exchange in exactly the same way as other stocks and shares."—[OFFICIAL REPORT, Standing Committee E, 15th May, 1947; c. 1055.]
I would agree with him that that is so, as long as the company on which the debentures were raised is still in existence. Then they are marketable, the same as mortgages are marketable, but directly the company on which those debentures were raised or secured goes out of existence, it appears that the debentures are no longer marketable. It seems to me that just as debentures are the first charge to be paid off on liquidation they should be paid off now on nationalisation. The difference between equity shareholders and debenture shareholders is shown by the fact that debenture holders have to have trustees to protect their interests. Again there is the word "foreclosure" associated with debenture holders—suggesting quite a different relationship with the company to that of equity shareholders. From the shareholder's point of view the debenture holder does not think of himself as part of a company in the sense that the equity holder does. He looks on himself as having a charge on the assets. Lastly, I suggest that the prejudice which exists against companies holding their own debentures is' evidence that the two classes of security are quite different. For all those reasons, I want to make this last


appeal for debentures and the other stock —preference and ordinary stock—to be treated as something different. I am certain that they are, but the Solicitor-General appears to think that they are exactly on the same basis.

Colonel Crosthwaite-Eyre: I beg to second the Amendment.
We on this side of the House consider for two reasons that the acceptance by the Government of this Amendment is essential. In the first place, while the Clause stands as it is now, one of the fundamental principles of commercial practice will be transgressed by the Government, and the other reason is that this distinction as it stands is unworkable and will lead to endless litigation, to endless questions of interpretation, and will do no good either to the case the Government are trying to make or to the people who have invested in this form of security. The fundamental principle involved is this. Whereas stocks and shares are the holdings of people who are partners in the company, debenture holders are creditors of the company. The two situations are, therefore, entirely distinct and different, and there is no comparison between the shareholder and the debenture holder. One holds a stake in the company and the other is a creditor of the company. We discussed this at some length in Committee, and I do not wish to weary the House again with those arguments. Indeed, they were accepted by the Government; I would only quote the Parliamentary Secretary to the Ministry of Fuel and Power, who stated:
I do not think we can possibly contest the fact that, in a formal legal sense there is a distinction between a debenture and an equity share; that is to say, a debenture is a loan from some person, in the formal legal sense to the company, whereas the equity share is part of the ownership of the company."— [OFFICIAL REPORT, Standing Committee E, 20th May, 1947; c. 1059.]
That is quite sufficient to show this distinction, and the essential basis on which we again raise this matter. If once the Government say that in any plan of nationalisation they are going to repudiate the debts entered into by a company the whole of their position seems to me to be untenable. In fact, in this Bill the Government have taken great care, except in this one respect, to safeguard the position of the companies' creditors. There-

fore, the first question we would ask the Government is, why this distinction? How can they, if they are sincere in what they have done in the rest of the Bill, make this differentiation on this point? For what reason do they say that they will acknowledge all the creditors of the company except the debenture holders— who are equally creditors—and whom they are going to abandon? That question needs very considerable thought by hon. Members opposite. And I hope that whoever is to reply will have something rather more convincing to say than had the Parliamentary Secretary in Committee, because the only statement he made was:
We regard debentures as marketable securities…"—[OFFICIAL REPORT, Standing Committee E,15th May, 1947; c 1055.]
I think I am right in saying that. I have been through the speeches very carefully, and in. the whole of his rather complicated argument that was the only statement he made. He went on to say, when we tackled him further on this matter that mortgages were acknowledged as debts whereas debentures were not. He said that debentures were marketable securities and mortgages were not. In fact, as every hon. Member of this House knows, that is not true. In a large number of cases mortgages are equally marketable securities. As for instance was mentioned in the Committee, agricultural mortgages are in many cases freely marketable, and, therefore, the first aspect of his case falls to the ground.
7.45 p.m.
I would stress this also to hon. Members opposite. If they will look at the Schedule which sets out the companies whose assets are being taken over and whose debenture holders are being compensated in this way, they will find that 75 per cent. of the companies have no Stock Exchange quotations for their shares. It is, therefore, a safe assumption to say that at least 75 per cent. of the debentures which the Government wish to take over at the moment are not marketable securities in the sense that the Parliamentary Secretary used that phrase. Therefore, either from the point of view of distinguishing between debentures and mortgages, or from the point of view of the actual facts of what he said, neither of his arguments can be substantiated.
I ask the Parliamentary Secretary further, if he is making this distinction between debentures and mortgages, on what basis does he make it? It is a fact that the exact definition of the term "debenture" has baffled the law lords for a considerable time. There are many cases, as the hon. and learned Gentleman opposite knows far better than I do, in which the highest legal authorities in this country have been unable to state exactly what comprises a debenture. I think that will be more easily realised in the light of the fact that in any ordinary deed creating a debenture the term "mortgage" is always used, and a debenture can only be created where, as some part of the deal, a mortgage is created on the assets so as to guarantee that debenture. If that is so, how is it possible to distinguish between a mortgage and a debenture? As far as I can see the only answer we can receive is that where, by accident, the term "debenture" appears in a particular case, it is to be treated as a debenture, but where by accident, the word "mortgage" appears in a particular case, then it, is to be treated as a mortgage. If that is so, the case of the Government again falls to the ground, because they will be saying that a debt in the creation of which one word happens by chance to have been used is to be honoured, whereas a debt in the creation of which another word happens by chance to have been used is to be cast aside.
Will the Solicitor-General tell us very clearly what definition of debenture he proposes to apply? There is none in existence at the moment, and if he intends to leave it as a matter of chance the Government will indeed stand convicted of a gross breach of trust. We on this side of the House have, obviously, an irreconcilable difference of opinion with hon. Members opposite about the principles of this Bill, but there is one thing which we have brought up time and time again during the last three days, and that is that the Government have trampled upon all the established practices of commercial law. [HON. MEMBERS: "Hear, hear."] Hon. Members opposite cheer. They would do well to think before they do so. Nobody is more keen than hon. and right hon. Members opposite to state that the success of this country depends on private enterprise and industrial reconstruction. Every time they disregard one of

these fundamental principles, every time they show that they have no regard for that which has been sanctioned by this country over a great many years, they make the alternative of "work or want" which faces this country less of an alternative and more of a certainty that the latter will hold.
On this matter, one of very great importance, one which, as my hon. Friend said, has no political importance, we appeal to the Government to respect tradition. We appeal to them to respect the contracts which have been acknowledged throughout the long period of our commercial history. Above all, we appeal to them not to try to differentiate between two types of debt, identical in nature, in such a way that one type will be paid and the other disregarded. If they do not accept this principle, I cannot see what hope they have of convincing the country of the sincerity of their intentions.

The Solicitor-General: I was not quite able to understand what this particular Amendment had to do with the question of merits as between a planned economy and a planless, chaotic economy. That mystery I shall have to leave locked in the bosom of the hon. and gallant Gentleman the Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) who advanced the argument, but so far as the Amendment is concerned I would say with the hon. and gallant Gentleman the Member for East Grinstead (Colonel Clarke), that there is not really very much to be added on either side to what has already been said. We take the view, for the purpose of compensation as between Clause 17 and Clause 13 (10) of this Bill, that debentures can fairly be said to come within the category of marketable securities. This has been said already and I simply repeat it.

Colonel Crosthwaite-Eyre: It is quite true.

The Solicitor-General: Looking at it through the eyes of the ordinary person who has money to invest I should have thought that, broadly speaking, he would consider what securities he could purchase in the stock market and would put them on one side, and that on the other side if he were minded to enter into an individual contract of loan to be secured by a mortgage, he would treat that as


an entirely different category of investment for his money. After all, one is an individual contract with individual incidence and individual liability as between borrower and the lender; the other, a debenture, is a security which has probably passed through a number of hands.

Colonel Clarke: It may have passed through a number of hands, but the security on which it is based has always been the same. Now it is intended to change that. The security was on a certain company's assets; it is now to be on the Treasury. I do not want to be critical as to which is the more valuable, but the fact remains that the security is to be changed.

The Solicitor-General: There are two kinds of security. One, as I say, is a security of which the terms are set out in an individual contract between the borrower and the lender—the ordinary mortgage. I quite accept the fact that one can purchase mortgages, but there is a limited and not an organised market for that purpose. There is no regularly quoted price for mortgages if one wants to buy them, but with regard to debentures that is not the case. One purchases debentures in the ordinary way on the Stock Exchange, and the prices are quoted, whereas in the case of an ordinary loan, generally speaking the creditor is the person who originally advanced the money, whereas in the majority of cases the person who is for the time being the holder of the debenture is a person who has purchased it from somebody who previously held it, and he has no relationship to the original lender of the money. It would be idle for me to controvert and useless to repeat the well-known differences between an ordinary quoted share and a debenture, but I am not suggesting that they are precisely parallel. In the one case the debenture holder is a creditor, usually with a charge, and in the other case he is a member of the company concerned.
That has been said over and over again in the course of this present discussion, but broadly speaking the practical way of dealing with this point is to ask, "What can you say is a marketable security—a recognised Stock Exchange security—on the one side, and what must you class in a category apart from that

as a loan of money pursuant to an individual contract between a borrower and a lender?" The hon. and gallant Member for New Forest and Christchurch said that 75 per cent, of the companies in the Schedule had issued securities which were not quoted on the Stock Exchange. I am told, subject to verification, that 90 per cent. of the values of the securities issued by those companies set out in the Schedule are in fact quoted. Therefore, we are drawing the distinction between a marketable security on the one side and a personal individual debt on the other. I do not think that it would advance the Debate if I went on to repeat the arguments which have already been used, and which the hon. and gallant Member for East Grinstead very kindly ascribed to me, although the eloquence was really attributable to my hon. Friend the Parliamentary Secretary.

Colonel Crosthwaite-Eyre: Before the hon. and learned Gentleman sits down, will he answer one question I put to him? How does he define the differentiation between a debenture and a mortgage?

The Solicitor-General: It is not a definition but it is a term which is clearly understood and which is ordinarily easily distinguishable from the sort of mortgage which is a charge which secures a loan as between an individual borrower and lender.

Mr. J. S. C. Reid: I must say that I am puzzled after hearing this argument because the definition drawn in the Bill —if it is drawn at all—is a distinction between a debenture and a mortgage upon the disposition of a security, whereas the distinction in the hon. and learned Gentleman's argument is between something quoted on the Stock Exchange and something not so quoted. I want Jo ask the hon. and learned Gentleman what is the position of something which, by any test, is quite clearly a debenture but is not quoted on the Stock Exchange. There must be such, and I want to know which class they come into—the class of security or that of debt. It is plain that the hon. and learned Gentleman's argument is directed entirely to those debentures—for all I know they may be 90 per cent. as has been suggested—which are quoted on the Stock Exchange. But supposing there are only 10 per cent. which are not quoted; how are they to be treated? I


am not arguing whether they ought to fall in one class or the other; I do not profess to have argued that out, but I am asking a straight question—into which class do the Government propose to put them?
There are a great many persons interested in debentures for comparatively small sums who certainly ought not to be asked to go to lawyers to work out this puzzle. Somebody, for example, who has a debenture for £100, £200 or £300 from a small electricity company ought not to have a legal puzzle put in front of him when he wants to know into which class he is going to fall. He should be told. As I have said, I do not want to argue which class it should be, but to know which class he will in fact fall into under the Bill. I think he will fall into the debenture class, although I think it is intended that he should fall into the debt class. It seems to me that if this definition is to carry out the apparent intention of the Government it ought to be modified now or at a subsequent stage in the Bill. I hope that the hon. and learned Gentleman will tell us that he will modify the definition to bring it into line with the argument he has put forward.

The Solicitor-General: If it comes within the definition of a security, then we have to look back at Clause 17. If the security in question does not come within Subsections (2), (3), (4) or (5), it falls to be valued under Subsection (7). Those that fall within Subsection (2) are those in respect of which there is a Stock Exchange quotation on particular dates.

Amendment negatived.

CLAUSE 60.—(Application to Scotland.)

8.0 p.m.

The Lord Advocate (Mr. G. R. Thomson): I beg to move, in page 71, line 4, at the end, to insert:
(2) For any reference to the Minister of Health there shall be substituted a reference to the Secretary of State.
This is merely a drafting Amendment.

Mr. R. S. Hudson: I think we are entitled to a more lucid and extensive definition than that of the Lord Advocate that this is merely a drafting Amendment.

The Lord Advocate: Amendments have been made to Clauses 14 and 19, and, as amended, they make certain provisions refer to the Minister of Health. The

Minister of Health does not operate in Scotland, where the appropriate Minister is the Secretary of State for Scotland, and that is why the Amendment is necessary.

Amendment agreed to.

FIRST SCHEDULE.—(Area Electricity Boards.)

Mr. Emrys Roberts: I beg to move, in page 73, line 2, to leave out from the beginning to the end of line 9, and to insert:

"The Wales Electricity Board
Anglesey, Brecknockshire. Caernarvonshire, Cardiganshire Carmarthenshire, Denbighshire, Flintshire, Glamorganshire, Merionethshire, Monmouthshire, Montgomeryshire, Pembrokeshire and Radnorshire.


The Merseyside Electricity Board.
Parts of Cheshire, Lancashire (including Liverpool) and Shropshire."

The purpose of this Amendment is to have one electricty board for the whole of Wales in order that, as we believe, the benefits of public ownership can be more fully developed in that country. The White Paper on Electricity Supply Areas, Command Paper 7007, deals with the principles on which these area boards have been constituted, and states that it is highly desirable that they should be natural areas with a strong local outlook and local interest. The function of the area board is to distribute electricity. In fact, the words of the Bill are:
to plan and carry out an economic and efficient distribution of electricity within the area".

The White Paper has considered the position of Wales and has come to the conclusion that because of technical difficulties which arise, it is more feasible to join up North Wales with Merseyside and establish South Wales as an area on its own. I do not wish to go into the technical questions, because I am not qualified to deal with them at any length, but I should like to submit some considerations to the Minister for having another look at this matter.

First, I should like to put to him that Wales is a long way behind England in the development and distribution of electricity in the rural areas. On 8th April, 1946, I asked the Minister of Agriculture what percentage of the farms in England and Wales was equipped with


electricity from public mains. The answer was that whereas in England 27 per cent. of all farms have electricity, in Wales only 9 per cent. have it. The price is high, and because of the lack of electricity and other amenities in the rural areas there is a difficulty in attracting diversified industries and in making the most of our agricultural activities. That is a paradox in a land where hydroelectric resources are so plentiful in the North and coal resources so plentiful in the South.

We welcome this Measure, because we think public ownership of electricity is a right step to take towards improving the conditions of the rural areas, and we quite naturally are entitled to ask how it will effect us in our own parts not in a nationalist spirit, but because we want to see the conditions of good life developed in Wales. I should like to submit arguments why, on balance, the considerations for treating Wales as a unit override the technical considerations which are apparent at first hand. The first argument of the Minister is that the main transmission lines run East and West, and to constitute Wales as a unit would mean running transmission lines over the mountains in order that they would proceed North and South. Having regard to the fact that the area board is not a generating authority like the Central Authority, but a distributing authority, I am not certain that that is a valid consideration, because the area board in any event will have to plan the installation of electricity and for taking the mains into the villages and towns. That may mean that the mains will have to go over the mountains, and, in fact, it has been done in recent years by the North West Power Company.

I appeal to the Minister not to' be bound by the present set-up and lay-out of electrical distribution in North Wales, because naturally the present layout has been governed by those circumstances which so often govern private enterprise in distributing electricity. First of all, they want immediate and adequate returns on the money expended; and, secondly, they often tend to ask for a contribution of a proportion of the capital from the areas which they supply. The present lay-out is not perhaps an indication of what may be achieved under public ownership, and it would be wrong

to tie up the future of the planning of Wales in a certain way, because the transmission lines have been restricted by the considerations which I have mentioned.

I want to come to what is, from the technical angle, a very strong argument. What is essential if this Bill is to succeed is that these area boards shall be live instruments and have a genuine impetus to plan within their areas. As I see it, one of the main requirements in Wales is for facilities for the rural areas. What I am much afraid of is that if North Wales is linked up with Merseyside, there will be a tendency to concentrate too much on the areas where the demand is heaviest, and not sufficient impetus to supply the rural areas which are not areas near Merseyside, but are in Mid-Wales, where electrification will necessarily operate very far from Merseyside. If the need for development exists in Mid-Wales, the consideration that it is technically necessary to tie up Wales with Merseyside does not arise. In this matter of planning the efficient distribution within an area, I do not think there is any real community of interest between North Wales and Merseyside, and I rather feel that if the whole of Wales were under one board there would be brought into that board a real interest and urge to plan together for the interests of Wales, and a sense of national responsibility would be brought to the job, and a pride in what might be achieved.

It is interesting to note that only in 1942 the Welsh Reconstruction Advisory Council, a most authoritative and distinguished body, recommended the setting up of a Welsh Electrical Development organisation. If Wales is to be broken into two areas, it may be impossible to achieve that development for the Principality as a whole. Clause 7 sets up one consultative council for the area of. each area board. If we have the area boards which the Bill proposes, we shall not have one consultative council for the whole of Wales, nor anyone to express the Welsh point of view or the public opinion of Wales as a whole. From that point of view it is essential to have one area board.

There is a wider consideration which I should like to mention. The expanding scope of nationalisation makes it very necessary to develop machinery which will break down excessive centralisation and avoid the dangers of bureaucracy, remote-


ness and impersonality, which are bound to be inherent in nationalisation on a big scale. We can only do that if our regional arrangements are of an order which will produce local interest and even local enthusiasm. In all these schemes there is a very valid argument for treating Wales as one unit. It is the argument which the Minister of Health accepted in the discussions upon the National Health Service Bill. I brought forward an Amendment and the Minister gave an assurance, which has now been carried out.

Mr. Norman Smith: The Minister of Health is Welsh.

Mr. Roberts: I am sure that the hon. Member who interrupted is not suggesting that the Minister of Health has been deflected from the true path because he is a Welshman. I* should say rather that the Minister had a wider vision. If a view is taken wider than that which involves only the present technical considerations, we shall release such national forces as will make the Bill in Wales the excellent Measure which it can become.

Professor Gruffydd: I beg to second the Amendment.
I do so because I am happy to be able to support what I think is a constructive Amendment, and secondly, because the excuse that the electricity transmission lines in Wales go from west to east rather than from north to south does not impress me in the least. We have suffered from that kind of excuse in Wales for a long time in many other respects besides electricity. Our electricity lines go from west to east because they have been constructed not to serve Wales but to serve England. Our railway lines run from west to east, our roads run from west to east for the same reason. The main object of the railways and of the roads, in the view of the Parliaments of the past, was, of course, to serve England and not to serve Wales. Now, having had imposed upon us transmission lines which run from west to east, we are told that we cannot have an area board in Wales just precisely because those transmission lines run from West to east. It is rather like the old custom—

8.15 p.m.

Colonel Clarke: On a point of Order, Mr. Deputy-Speaker. May I draw your

attention to the fact that there is not the requisite number of hon. Members in the House?

Mr. Deputy-Speaker: That may or may not be true, but it is against the rule of the House to call a count between 7.30 and 8.30.

Mr. Gallacher: Try it again. Look at the Tory benches.

Professor Gruffydd: To advance that as an excuse for not giving us an area board in Wales is like what happened under old barbaric systems when a king who had cut out the eyes of his heir might say to him, "Now you cannot become king after me because you have no eyes." We have been deprived of the one advantage we ought to have had—of transmission lines running from North to South—and now because of that disadvantage we are not to be given an area board. Wales is par excellencea unit for an area board. It has the two essentials of an area board —inexhaustible coal and water power on the one hand, and very great industries on the other. The demand and the supply are there in the same country, and they should not be separated. It has often been said that our resources are used not for Wales itself but always for England. We have a rainfall which is greater than in any other part of Britain except for parts of Scotland, and we are not allowed to make our own use even of this. Our rainfall is collected not to serve us but to serve Birmingham and Liverpool. Whenever there is a new project for a water supply for a town in the North of England, the first source they think of is Wales. The same thing will happen if Merseyside is connected to Wales under the area board. That area board would function not for the sake of North Wales, but for Liverpool and Lancaster. We have suffered from that sort of thing in the past and we are likely to suffer in the same way in the future.
I should like to cross the t's and dot the i's of one thing which has already been said by my hon. Friend the Member for Merioneth (Mr. Emrys Roberts). It is time this Parliament started protecting Wales from being divided against itself time after time by Bill after Bill. This will emphasise the worst division—the division between North Wales and South Wales. My hon. Friend said that he welcomes this Bill. All of us on the


Liberal benches welcome it: [HON. MEMBERS: "Both of you?"] There are more than two hon. Members in the Liberal Party as a matter of fact, and there are unfortunately a good many Tories in it outside the House. I was going to say that we welcome this Bill, but we realise that the impact of nationalisation on the national life in Wales will be immense— far greater than anything in the past. While we welcome the Government's plans for the nationalisation of different industries, we want to be assured that we can welcome them as a nation and not as two halves.

Mr. Birch: The hon. Member for the University of Wales (Professor Gruffydd) has said that the impact of nationalisation on Wales is very great. What he has done is to swallow the camel of nationalisation but he is now trying to spit up the gnat, because what is now happening is the inevitable consequence of this Measure of nationalisation.

Professor Gruffydd: May I suggest that the camel is more appropriately a concomitant of the needle's eye?

Mr. Birch: I suggested the hon. Gentleman had swallowed the camel. Before this was brought in there was a great deal of local control of electricity supply but it was inevitable, when you get the nationalisation of the electricity industry, that what has happened under this Bill would happen. I think the hon. Gentleman has ignored the existence of the mountains in the middle of Wales. Once you accept nationalisation, you lose the local control you had before. If the Liberal Party had stuck to their principles, and not accepted nationalisation, they would not be in the awkward position they are in now.

Mr. Gallacher: As a Scotsman who, in the near future, may be looking for allies, I am happy to support this Amendment and I would ask hon. Members to consider the principle involved in it. No matter how you play with it, the principle involved is the spirit of an ancient nation, a nation with a long and honourable tradition. Hon. Members opposite are not the least bit interested in the soul or the spirit of a nation. They are interested in hard cash. They are always "on the mooch."

Mr. Birch: Is the hon. Member not in danger of deviation from party lines on this subject because, as I under-stood it, nationalisation is a Communist doctrine?

Mr. Gallacher: I will take all responsibility for any deviation I may make, and I will never ask any of the hard-faced gentlemen opposite to be my guarantors.

Hon. Members: Order.

Mr. Deputy-Speaker: I cannot see any connection between what the hon. Member is now saying and the Amendment on the Order Paper.

Mr. Gallacher: I want to support this Amendment, Mr. Deputy-Speaker, and I was saying that hon. Members opposite are not interested in the soul of a nation but, mention money, and their eyes glitter. I am convinced that all the generating power which is possible it there was one area board, could become an important factor for the' whole of the general Welsh economy. It would guarantee light to the dark places which are up there in Wales as they are in Scotland because of the exploitation of each of these small countries that has gone on in the past. It is because of the desire I have to see a nation with the vision and long tradition of Wales, manifested century after century and generation after generation, given the opportunity and the encouragement to build up one powerful electrical organisation, helpful to Wales and its people and bringing light to the whole country, that I support the Amendment.

Mr. Shinwell: I have not heard the speeches in support of this Amendment as I was engaged in taking a little nourishment, in order to fortify myself against the attacks of hon. and right hon. Gentlemen opposite.

Mr. R. S. Hudson: The right hon. Gentleman has been a very long time about it.

Mr. Shinwell: I have never found that the right hon. Gentleman the Member for Southport (Mr. R. S. Hudson) ignores such considerations. I shall not enter into discussions of whether or not we can fortify the soul of Wales by permitting complete independence. That has nothing to do with this Bill. But I must ask the House to reject the proposal—somewhat


regretfully, because I fully appreciate the intentions of Welsh Members in this matter—because of the technical considerations involved. Wales, in fact, is not an entity in the realm of electricity supply. The transmission lines do not run from South Wales to North Wales. In both Northern Wales and Southern Wales the transmission lines run from East to West and it would be folly, at any rate at the present time, and for some time to come, whatever decision is reached subsequently when the area is fully developed to disturb the existing system. That would confer no advantage on Wales at all. In the matter of electricity supply, we have to maintain in Wales, or in any part of the country, a proper balance of load. Some parts of the country are uneconomic in the sphere of electricity supply distribution, hill areas, remote areas, which are not yet urbanised, and therefore are not yet capable of fortifying themselves economically. In this matter we must maintain a correct balance. The congested, profitable economic urbanised areas must rally to the assistance of the rural areas. I imagine the House will agree that that is a sound proposition, and it is therefore much more desirable that North Wales, which is not highly developed in the sphere of electricity supply should be integrated, at any rate for some time to come, with the urbanised Merseyside area as a result of which North Wales will gain more advantage, than if it were integrated with the rest of Wales
That shortly is the case against the proposition, but I would direct attention to the fact that we have the power to vary the areas. We must come to the House if such a proposition should be made, because on the matter of variation of areas we must secure the consent of the House. No doubt in due course—not for some time, font in the future—it may be necessary to ask consent for the variation of areas. If the circumstances of that time justify a reconsideration of the Welsh position, I have no doubt that whoever is responsible for the conduct of the industry will take those factors into consideration. For the moment, I am unable to accept the proposal.

8.30 p.m.

Mr. Hopkin Morris: I do not know whether the Minister is holding out some promise for the future. I understand that he says that development at the moment is from East to West both

in North and South Wales. That is true, because in building up the electricity supply it has been based upon an East and West division. If that is perpetuated in the future, Wales will always be divided, and there will be an argument for it on a basis of fact. It is no argument to say that this is a basis of fact because it happened in the past. I do not know if the Minister is holding out some hope for the future when he says that this division may not be permanent. We are here dealing with the area board, that is, an administrative body. I see no reason why the administrative body should coincide with the electricity lines. Why should there not be an area board for Wales, joining North and South, with an arrangement for the North to take its electricity supply from the area of Liverpool? A similar arrangement has already been provided for in the health service, where the same problem arises, especially in North Wales. Liverpool? supplier hospital accommodation for North Wales. That is an administrative arrangement, and the Minister of Health has recognised that position. I see no reason why the Minister should not recognise the administrative difference, and make arrangements, no matter from whence the supply comes, for an area board for Wales. I hope he will consider that at a later stage.

Mr. Shinwell: That point was considered. I am not unsympathetic to the point of view which has been expressed, but administration must be associated with the physical assets and the like, otherwise it is impossible to ensure efficient administration. I am sorry that I cannot accept the Amendment.

Amendment negatived.

THIRD SCHEDULE.—(Adaptations and Modifications of Enactments.)

The Solicitor-General: I beg to move, in page 80, line 25, at the end, to insert:


"s. 21
…
After the Word 'consent' in the first and third places where it occurs, the words 'or authorisation' shall be inserted, and after the word 'to' in the first place where it occurs there shall be inserted the words 'or for'."


This Amendment, which should be read in conjunction with the Amendment, in page 88, line 44, column 2, effects the same purpose. It is to bring into line with the new provisions of Clause 9 of the Bill Section 21 of the


1919 Act, which deals with the placing of an electric line above ground, under the provision of the Electric Lighting (Clauses) Act, 1899.Clause 9 has given a new power to do that, and this Amendment makes the necessary alteration to Section 21.

Amendment agreed to.

The Solicitor-General: I beg to move, in page 82, line 5, column 2, at the beginning, to insert:
In Subsection (1) for the word 'applications' there shall be substituted the words 'application is,' after the words 'place the line' there shall be inserted the words 'or, as the case may be, may commence proceedings under the Acquisition of Land (Authorisation Procedure) Act, 1946, as applied by Section nine of the Electricity Act, 1947, to purchase compulsorily a right to place the line' and at the end of the Subsection there shall be inserted the words' or, as the case may be, under the said Section twenty-one and under the said Act of 1946 as so applied.' 
This, again, is little more than a drafting Amendment. It applies Clause 9 to Section 44 of the 1926 Act. 'That Section enables the Minister to proceed, in the matter of certain inquiries, simultaneously under Sections 21 and 22 of the 1919 Act, which provides for alternative inquiry machinery. This Amendment adds a third alternative where the provisions of Clause 9 are brought into it. Clause 9 is the one which applies the compulsory acquisition procedure and gives certain rights with regard to the laying of electric lines. This is really a matter of drafting.

Amendment agreed to.

The Lord Advocate: I beg to move, in page 84, line 8, after "standards," to insert:
and which shall be such as to secure the provision of separate information as respects the generation of electricity, the distribution of electricity and each of the main other activities of the Board.
This is consequential on the Amendment made to Clause 41. It secures that a statement of accounts of the North of Scotland Board shall include separate information concerning the board's activities in the same way as is done in the case of the accounts of the authorities.

Amendment agreed to.

Further Amendments made:

In page 85, line 30, leave out "national interest," and insert "interests of national security."

In page 86, line 36, column 2, leave out "generation," and insert "generating."

In page 88, line 44, column 2, at end, insert:
and in the said paragraph (b)for the words from 'without' to 'also' there shall TEFL substituted the words 'without the express consent or authorisation of the (Minister of Fuel and Power and the express consent of the local authority also.' "—[Mr. Shinwell.]

FOURTH SCHEDULE.—(Enactments Repealed.)

Mr. R. S. Hudson: I beg to move, in page 91, line 5, column 3, to leave out "19."
I gather that it would be convenient if we considered at the same time the next two Amendments, in page 91, line 16, column 3, after "23," to insert, "except Subsection (1)," and in line 22, column 3, to leave out "24." There is a common thread running through them. All theses three Amendments were discussed in Committee and rejected by the Committee as a result of what, on further consideration, we think were misunderstandings. We hope that they can be accepted now. They are not of major importance. The effect of the first Amendment is to save from repeal Section 19 of the 1882 Act. In the course of our discussion upstairs the Parliamentary Secretary said:
It is certainly our intention, in relation to Sections 19 and 20 of the 1882 Act, that both safeguards should apply to all consumers."— [OFFICIAL REPORT, Standing Committee E, 6th May, 1947; c. 912.]
That has been carried out in the case of Section 20. Apparently it has been overlooked in the case of Section 19. The effect of Section 20 is to say that no consumer must be given unduly favourable terms. Section 19 says that no consumer must be given unfavourable terms. One is a positive and the other a negative discrimination, and I imagine that, in the circumstances, the Government will be prepared to accept this Amendment. Shall I deal with this one first, Mr. Deputy-Speaker, and then deal with the other two?

Mr. Deputy-Speaker: It will be in Order if the right hon. Gentleman will deal with all three Amendments together.

Mr. Hudson: So far as the Amendment to line 16 is concerned, it concerns the subject of the acquisition of land for gas undertakings. This matter, again, was


debated upstairs and the Solicitor-General said that the protection was unnecessary because, in fact, the compulsory purchase of land would be under the Land Acquisition (Authorisation Procedure) Act, 1946, which protects land belonging to statutory undertakings. That is quite true, but a certain number of cases will arise where the land belongs to non-statutory undertakers, and, in such cases, the protection of that Act does not run. Therefore, we suggest that, as a certain number of cases will now arise involving non-statutory undertakers under the new Schedule subsequently to be discussed, it is desirable to restore this small protection.
In regard to the next Amendment, here again this matter was debated in Committee, and this Section which we desire to save imposes a penalty on undertakers who do not carry out their statutory obligations. The Solicitor-General said that, in the case of local authorities not carrying out such statutory duties, there was no penalty, and that the only thing which the Ministry could do was to look up their special order to see if the local authority had not carried out its duties to supply. I am not surprised, in view of the multiplicity of jobs which the Solicitor-General has to do, that he made what we think was a slight slip in this case, because under Section 23 the Minister has power to impose such conditions as he thinks fit and any conditions so imposed shall be regarded by the undertakers as having statutory effect. No doubt, the Solicitor-General had the point in mind when he talked about looking at the order, but, in fact, under this Section, as we want to see it restored, there is a right to impose conditions which in effect amount to the issuing of directions to the local authority, and we think that the Minister ought to have similar powers to give directions to the Central Authority. I do not suggest that these Amendments are of particular importance, but I hope the Government will see their way to accept them.

The Solicitor-General: I think that, with regard to one of the Amendments, we can go a little way to meet the case which has been made by the right hon. Gentleman, but not with regard to the other two, and I will endeavour to state my reasons. With regard to the first of these Amendments, which would have the effect of resurrecting Section 19 of the

Electric Lighting (Clauses) Act, 1882, the right hon. Gentleman will recollect that, when we were discussing Clause 32 (7) earlier in these discussions, we accepted an Amendment in the name of the hon. Member for Northwich (Mr. J. Foster) dealing with undue discrimination. We feel that, as Subsection (7) stands, or as it will be worded when these words have been brought into it, it will accomplish, so far as we feel it ought to be accomplished, the object which the right hon. Gentleman has in mind.
In point of fact, the provisions of the Bill, as it stands give the statutory consumer only the rights conferred by Section 27 of the Electric Lighting (Clauses) Act, 1899. The non-statutory consumer, as pointed out earlier in our discussions, is left in the same position as he was before, subject to the point which I think interested the hon. Member for Stockport (Sir A. Gridley) very much, the extension of the liability of an undertaker, now the Board, to provide distributing mains. Hon. Members will know, of course, that a statutory consumer is the consumer who owns or occupies premises within 50 yards of the distributing main.
8.45 p.m.
We have provided that the Board shall be under the obligation, at the request of six or more persons, to lay down a distributing main, not merely along a street, but along a route, which considerably widens the burdens placed upon them, and, therefore, greatly extends the category of persons who come within the scope of Section 27 of the Schedule to the 1899 Act, and who, accordingly, become statutory consumers with the right to demand a supply. Having done that, and having enlarged the scope of the Act, we feel that we have supplemented that by the provisions of Subsection (7) to such an extent that we have virtually covered the ground which is covered by Sections 19 and 20 of the 1882 Act. For those reasons and because in other words, we have virtually done what the first Amendment seeks to do, I ask the House to reject that Amendment.
With regard to the second Amendment, we feel that, at a later stage in the life of this Bill, before it becomes an Act, we could go some way towards meeting what the right hon. Gentleman proposes; but we cannot accept the Amendment as it stands because it has a serious drafting


defect, in that it incorporates part of Section 23 of the Schedule to the Electric Lighting (Clauses) Act which relates to the special Act. As there is no special Act, it would be meaningless to bring in that part of the Section. But without giving any formal undertaking, we will consider introducing into the Bill the first part of the Section, suitably drafted, which the right hon. Gentleman desires With regard to the final Amendment, we feel that we cannot accept it, if for no other reason than that it would be meaningless in the context, because what happens is this: Section 24 of the Electric Lighting Act, 1909, provides that nothing is to enable the Board of Trade to authorise the compulsory acquisition of land belonging to a Statutory undertaker; they can authorise only the acquisition of such land under Section 1 of the 1909 Act. Section I of that Act is repealed by this Bill. Therefore, if the Amendment were accepted, it would, as I say, be meaningless, because it would simply say that the Board of Trade shall not be empowered to take certain action under a Section which has been repealed. For that reason, I ask the House to reject the Amendment.

Mr. R. S. Hudson: With the leave of the House, I would like to ask one further question. Do I understand that during the remaining stages of the Bill the Government will consider some alteration in order to do what our Amendment, even though it may be defective in form, was meant to do, namely, to protect lands of non-statutory undertakers? I understand that practically all the gas undertakings are non-statutory, and that, from the practical point of view, there is a definite problem to be solved. Perhaps the Solicitor-General would look into that point, because there is a very genuine case which requires to be safeguarded.

The Solicitor-General: The Solicitor-General indicated assent.

Mr. Boyd-Carpenter: I would be grateful if the Solicitor-General would clear up one point. He has been very reasonable in his response to my right hon. Friend the Member for Southport (Mr. R. S. Hudson), but I am not clear on one point with respect to the first Amendment which seeks to preserve Section 19 of the Act of 1882. The Solicitor-General told the House that the provision incorporated today in the Bill, if I may quote his own

word, "virtually" has the same effect. He used the word "virtually" on two or three occasions, and I took it to mean that the provision did not completely have the same effect as Section 19 of the 1882 Act. As the Solicitor-General is aware, that is a very important Section. It provides that there shall be no discrimination against an individual consumer by charging him more than similar consumers are charged. That is obviously a very important provision. Perhaps the Solictor-General, with the leave of the House, could make it quite clear to what extent his new provision fails to go the whole distance of the 1882 Act. He said "virtually" did. That presumably means that it does not do so completely. To what extent does it not do so?

The Solicitor-General: If I may have the leave of the House to reply, the reason I used the word "virtually" was because the Section contains the expression,
part of an area.
It is extremely difficult to define what one means, in relation to the area of an undertaker, when one refers to "part of an area." It will be considerably more difficult when one considers the greatly enlarged areas of the area boards. Therefore, when I used the expression "virtually," I was doing so in order to prevent myself saying that Subsection (7) meant exactly the same as a provision the precise meaning of which I myself could not define.

Mr. J. Foster: I would like to reinforce the point made by my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). I would like the Solicitor-General to tell us whether the principle of the Amendment is or is not accepted. The object of the Amendment is to preserve the immunity from interference of all gas and water undertakers. As the law will stand if this part of the Bill goes through unamended nonstatutory undertakers will not be protected from interference. I believe that to be the law. If I am wrong, I would be grateful if the Solicitor-General would correct me. If, on the other hand, I am right, I would be grateful if he would state why he does not want non-statutory undertakers to be protected from interference.

The Solicitor-General: If I may again ask the leave of the House to reply, as


the hon. Gentleman says, the protection given in paragraphs 9 and 10 of the First Schedule of the Acquisition of Land Act relate to the property of statutory undertakers. I believe the greater number of the non-statutory undertakers are in Scotland, about which I rather hesitate to speak, but, as I have said, if hon. Members opposite will be good enough to give us their advice between now and a later stage, we will consider very carefully what they say. I do not intend that to be taken as a formal undertaking.

Mr. R. S. Hudson: I am obliged to the hon. and learned Gentleman. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Solicitor-General: I beg to move, in page 91, line 32, column 3, to leave out "33" and to insert "32."
The object of this Amendment is to preserve from repeal the provisions of Subsection (1) of Section 33 of the Electricity Supply Act. That is a Section which enables the provisions of the Local Government (Superannuation) Act, 1937 —that Section as amended by later Sections—to be applied and used for pension purposes. As the Bill stands at the moment that Section is repealed. We can do that by regulations, if we think fit; under the Bill as it stands we have regulation-making power with regard to pensions. We feel that it is possible that it may be desirable for the area boards or the Central Authority to avail themselves of the provisions of the Superannuation Act of 1937, and, therefore, we do not want to repeal that power at the moment. If we should desire to do so hereafter, if it is found unnecessary to use the provisions of the 1937 Act, we should prefer to do so by regulations under the regulation-making power.

Mr. R. S. Hudson: I dare say there is something to be said for this, so far as convenience is concerned; but, as I understand it, the effect of what we are being asked to do is to give the Government power to repeal an Act of Parliament, not by another Act of Parliament, but merely by Order in Council or regulation. It seems to me to be going rather far.

Amendment agreed to.

Mr. Shinwell: I beg to move:
That the Bill be re-committed to a Committee of the Whole House in respect of the

Amendments to Clause 13, page 15, line 6; Clause 13, page 16, line 2; Clause 13, page 16, line 32; all the Amendments to Clause 14; the Amendments to Clause 17, page 24, line 13; Clause 19, page 28, line 32; Clause 20, page 30, line 9; Clause 20, page 30, line 16; Clause 2i, page 33, line 8; Clause 22, page 33, line 11; Clause 22, page 35, line 35; Clause 23, page 36, line 14; Clause 24, page 38, line 38; Clause 25, page 38, line 45; Clause 26, page 39, line 40; all the Amendments to Clause 29; the Amendments to Clause 30, page 44, line 34; Clause 34, page 47, line 33; Clause 35, page 48, line 19; Clause 37, page 49, line 21; Clause 50, page 61, line 28; Clause 59, page 67, line 44; Clause 59, page 68, line 9; Clause 59, page 69, line 7; Clause 59, page 70, line 19; Clause 59, page 70, line 38; and of all the new Clauses and of the new Schedule standing on the Notice Paper in the name of Mr. Shinwell.

Lieut.-Colonel Elliot: We do not propose to oppose the Motion, but we had moved that the Bill be considered in Committee of the Whole House, and I really do think it would have beep a saving of the time of the House if that had originally been done. The Government are now proposing to embark on what is very nearly a Committee stage of the Bill at the end of a long day under conditions which, although they are improved by the concessions of the Government to the suggestions made to them, do not by any means meet the position which should be met if the House of Commons is to legislate on this great and important subject as it ought.

Mr. Shinwell: I only want to say that we are getting on so well it is a pity to spoil it.

Bill immediately considered in Committee.

[Mr. HUBERT BEAUMONT in the Chair]

9.0 p.m.

Lieut.-Colonel Elliot: On a point of Order, Mr. Beaumont. We have now gone into Committee, and earlier we did discuss with Mr. Speaker what the position would be at the conclusion of this stage. As Mr. Speaker said—

The Deputy-Chairman: That may be so, but we cannot now, in Committee, discuss what may happen later when the Committee stage ends.

Lieut.-Colonel Elliot: I wish only to ask what the position would be if manuscript Amendments are put down. If no Amendment is made during the Committee stage,


the Clauses, of course, would be unchanged. If, however, the Opposition or any hon. Member desired to submit manuscript Amendments, could you give us your guidance whether such Amendments would be in Order, in view of the unusual fact that we are taking the Committee stage after the Report stage. Manuscript Amendments are usually out of Order on Report.

The Deputy-Chairman: That is a matter on which I can give neither guidance nor a Ruling. It is a matter for Mr. Speaker.

Mr. R. S. Hudson: Further to that point of Order. Does not that depend upon who happens to be in the Chair? Is it certain that Mr. Speaker will be sent for and will be in the Chair when the Committee stage comes to an end?

The Deputy-Chairman: That is not for me to decide. We are now at the commencement of the Committee stage, and I can deal only with the Amendments on the Order Paper. I cannot now deal with any matter which does not relate to the Committee stage.

CLAUSE 13.—(Vesting of assets of electricity undertakings.)

Mr. Gaitskell: I beg to move, in page 15, line 6, to leave out Subsections (2) and (3).
While discussing this Amendment I should like also to mention the two following Amendments: in page 16, line 2, to leave out from "any," to the end of line 3, and to insert "electricity holding company," and in page 16, line 32, to leave out from "any," to "company" in line 33, and to insert "electricity holding." These Amendments are paving Amendments to the proposed new Clause —(Bodies to whom Part II of Act applies)—which we shall move later. I hope, therefore, that we shall have the agreement of the Opposition to allow these Amendments to go through as paving Amendments, on the usual understanding.

Amendment agreed to.

Further Amendments made: In page 16, line 2, leave out from "any," to end of line 3, and insert, "electricity holding company."

In line 32 leave out from "any," to "company," in line 33, and insert, "electricity holding."—[Mr. Gaitskell.]

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

Lieut.-Colonel Elliot: On a point of Order, Mr. Beaumont. We do not intend to debate this Clause, but I take it, in regard to future Clauses, now that we are back in Committee, not merely the Amendments but the Clauses as a whole are subject to the general consideration of the whole Committee?

The Deputy-Chairman: Debate on the Clause, as amended, will be permitted.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 14.—(Provisions as to undertakings of local authorities.)

The Solicitor-General: I beg to move, in page 19, line 47, to leave out from "property," to "in," in line 1, page 20, and to insert:
held or used by the local authority wholly or mainly.
This is the first of a series of Amendments designed to achieve the same purpose. Doubts had arisen under Clause 14, as to precisely what it was that would be transferred upon the vesting of the assets of a local authority. An example quoted as an illustration of the doubts which had arisen was the case of a town hall which might be vested simply because there was an electricity sub-station in the basement. The relevant words of the Clause are at the moment—
rights, liabilities and obligations held, used or incurred by the local authority in their capacity as authorised undertakers and accordingly references in that section.
It was said that in the case I have instanced it might be argued that the town hall could be said to be held in their capacity as authorised undertakers. That is not intended at all. What the Amendments seek to do—and this is the keynote which runs through all of them—is to substitute for the words I have quoted:
property held or used by any local authority partly in their capacity as authorised undertakers and partly in other capacities.
They provide machinery whereby these two types of property can be divided. The test is whether the property is held or used by the local authority wholly or mainly in their capacity as authorised undertakers, and that enables a distinction to be drawn


in a case such as I have instanced. If hon. Members will look at the Amendments on page 4021 of the Order Paper, they will see that they are all directed towards substituting the test of "wholly or mainly" for the test of "held in their capacity as undertakers." They provide machinery for drawing a line between property held by a local authority as an undertaker, and property held in some other capacity.

Mr. R. S. Hudson: The explanation given by the Solicitor-General has convinced hon. Members on all sides of the commonsense of these Amendments I would suggest to him that composite companies are in an analogous position to that of local authorities in respect of a great deal of this sort of property. We should be grateful if the hon. and learned Gentleman would give consideration to the question of whether a similar provision could not be applied to the analogous case of composite companies.

Amendment agreed to.

Further Amendments made: In page 20, line 2, after "undertakers," insert:
and rights, liabilities and obligations acquired or incurred by the local authority in the said capacity.

In line 8, leave out "rights, liabilities, obligations," and insert:
held or used by the local authority wholly or mainly in their capacity as authorised undertakers and rights, liabilities and obligations acquired or incurred by the local authority in the said capacity or, as the case may be, to.

In line 13, at end, insert:

"(a) for excluding from or including in the property which vests in an Electricity Board by virtue of this Act, such property held or used by any such local authority partly in their capacity as authorised undertakers and partly in other capacities, on such terms (which may include the payment of money), as may be agreed between the Electricity Board concerned and the local authority or, in default of agreement, determined in accordance with the regulations;
(b) for requiring any Electricity Board, as respects property which vests in them by virtue of this Act, being property held or used by any such local authority partly in their capacity aforesaid and partly in other capacities, to grant to the local authority such interests in the property or rights over or attaching to the property or in respect of the user thereof, on such terms (which may include the payment of money), as may be agreed between the Electricity Board and the local authority or, in default of agreement, determined in accordance with the regulations, or for requiring the similar grant of interests

or rights by the local authority to the Electricity Board in a case where such property does not vest in the Board."

In line 37, at end, insert:
For the purposes of this Subsection, any property which is held or used by a local authority temporarily in their capacity as authorised undertakers and normally in other capacities, or normally in the said capacity and temporarily in other capacities, shall be deemed to be property held or used by a local authority partly in the said capacity and partly in other capacities."—[The Solicitor-General.]

The Solicitor-General: I beg to move, in page 20, line 38, to leave out Subsection (3).

This is a drafting Amendment.

Mr. R. S. Hudson: This seems to be a large piece of drafting, extending over 12 lines. Perhaps the hon. and learned Gentleman could explain it.

The Solicitor-General: It is drafting in the sense that Subsection (3) has been lifted bodily out of Clause 14, and will be transferred, if these Amendments are accepted, to Clause 19.

Amendment agreed to.

Further Amendment made: In page 21, line 8, leave out from "property," to third "or," in line 9, and insert:
is or was held or used by any such local authority wholly or mainly in their capacity as authorised undertakers or whether any rights, liabilities or obligations were acquired or incurred by any such local authority in the said capacity or whether any agreements or documents relate."—[The Solicitor-General.]

The Solicitor-General: I beg to move, in page 21, line 11, to leave out from "undertakers," to "shall," in line 14.
This is a drafting Amendment of the same character as the one we passed a few moments ago. These words go from Clause 14 to Clause 19.

Amendment agreed to.

The Solicitor-General: I beg to move, in page 21, line 15, after "Minister," to insert "of Health."
This Amendment is to meet a point raised in Standing Committee by the hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre).

Colonel Crosthwaite-Eyre: No.

The Solicitor-General: I am very sorry. I thought it was the hon. and gallant Member who raised the point. However,


it was said by a Member of the Opposition that the Minister should not be the person to determine questions arising on the vesting of local authority undertakings, and my hon. Friend the Parliamentary Secretary suggested that it would be appropriate for the Minister of Health to be substituted for the Minister of Fuel and Power.

9.15 p.m.

Colonel Crosthwaite-Eyre: I think that on consideration the learned Solicitor-General's remark should be withdrawn.

The Solicitor-General: I hope that the hon. and gallant Gentleman does not think that anything I have said was meant to be offensive to him. The reverse is very much the Case. I thought that he had made the suggestion, and I found that he had not, but as I thought that it was a good suggestion I complimented him on being the reputed author of it.

Amendment agreed to.

Further Amendment made: In page 21, line 20, at end, insert:
(5) Where at any time before the expiration of three months beginning with the vesting date a local authority has served on the Minister of Health and on the Electricity Board concerned, or an Electricity Board has served on the said Minister and on the local authority concerned, a notice in the prescribed form stating that a question has arisen under this Section or under any regulations made thereunder as to—

(a) whether any property is or was held or used by the local authority wholly or mainly in their capacity as authorised undertakers and accordingly vests in the Electricity Board by virtue of this Act;
(b) whether any property of the local authority ought to be excluded from or in eluded in the property which so vests;
(c) whether interests in any property of the local authority, or rights over or attaching to such property or in respect of the user thereof, ought to be granted by the local authority to the Electricity Board or by the Board to the authority; or
(d) whether any lease ought to be severed; and the question has not been settled by agreement or determined before the vesting date, the property concerned shall not, pending such agreement or determination, vest in the Electricity Board by virtue of this Act and, if the notice is given after the vesting date, shall be deemed not to have so vested, but the property shall, so far as it is so to vest having regard to the agreement or determination, vest on such date as may be agreed or determined, and pending the settlement or determination of the said question and the vesting of property and the granting of interests or rights in accord-

ance therewith, the Electricity Board shall be entitled and shall be deemed to have been entitled as from the vesting date to use the property for the like purposes and to the like extent as it was used, immediately before that date, by the local authority in their capacity as authorised undertakers, on such terms (which may include the payment of money) as may be agreed between the Electricity Board and the local authority or, in default of agreement, determined by the Minister of Health."— [The Solicitor-General.]

The Solicitor-General: I beg to move, in page 21, line 26, after "authority," to insert:
or be transferred to that Board any property forming part of a sinking fund established for the redemption of any such loan.
This rectifies an error in the Clause as drafted, and provides that sinking funds established for the redemption of a loan should not be transferred on vesting, the position being that in the case of authorities with services on loan it is appropriate that the sinking fund should not be transferred. That was not provided for in the Clause as it stands, and this Amendment remedies that omission.

Amendment agreed to.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

Mr. R. S. Hudson: The Minister, at an earlier stage this afternoon, saw fit to admonish us that "a little knowledge is a dangerous thing." If he will lake the trouble to look back and read this Clause over again, perhaps he will realise that a little knowledge is not only a dangerous thing but causes a great deal of trouble to this Committee by reason of his having had to recommit all this.

Lieut.-Colonel Elliot: I would ask the Minister to realise how extremely reasonable we have been in dealing with this Clause. [Interruption.] I hope that the hon. Member realises that also. The whole of Clause 13, which raises great issues on vesting, we have allowed to go, although we had a perfect right to discuss it in Committee and could have discussed it indefinitely here. On Clause 14 we have not attempted in any way to delay the passage of the Bill. I trust that both the Minister and the Government will realise, when we come to the later stages, that we are allowing to pass, without any attempt at obstructing, Clauses which could perfectly well have been discussed


at considerable length, because we are desirous of having discussions on later points of importance which arise on the Minister's new Clauses.

Mr. Shinwell: I am not complaining about the attitude of the right hon. and gallant Gentleman. I am delighted to witness such sweet reasonableness, and all I hope is that we keep it up.

Colonel Crosthwaite-Eyre: I would like to' offer my apologies to the learned Solicitor-General for the misunderstanding which arose earlier.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 17.—(Compensation to holders of securities of bodies other than local authorities.)

The Financial Secretary to the Treasury (Mr. Glenvil Hall): I beg to move, in page 24, line 13, after "authority," to insert "or a composite company."
Perhaps I ought to offer a brief explanation of this Amendment to the Committee, because the reason for inserting these words here is not apparent as we have not yet dealt with the new Clause to which reference is here made. This Clause lays down the compensation to be paid to undertakings other than local authorities, and as I think the hon. Members of the Committee are now aware, there are companies which are to be known as "composite companies." They are companies which are engaged in other activities besides the provision of electricity; they may provide gas, or water, or both; and by a new Clause which we shall be coming to presently, we intend to deal with companies in that situation. The short point here is that those companies, unlike the companies to which this Clause refers, will continue in existence, and therefore we shall be paying compensation not to the holders of securities but to the companies themselves. As I have said, we shall be dealing with the matter more fully when we come to the new Clause, and perhaps that brief explanation will be sufficient at the moment.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 19.—(Compensation to local authorities.)

The Solicitor-General: I beg to move, in page 28, line 32, to leave out Subsections (2) to (5) and to add:
(2) Where the local authority have raised a loan wholly or partly for the purposes of their functions as authorised undertakers, or have advanced money for those purposes out of any consolidated loans fund or mortgage loans pool established by them or out of any other moneys held by them, and, in pursuance of the arrangements in force immediately before the vesting date for the redemption of the loan and the payment of interest thereon or, as the case may be, for the repayment of the advance and the payment of interest thereon, any amounts would, but for this Act, have fallen, on or after the vesting date, to be debited in the accounts of the local authority in their capacity as authorised undertakers, the Central Authority shall, subject to the provisions of this Section, pay those amounts to the local authority at the times at which, but for this Act, those amounts would have fallen to be debited in the accounts of the local authority in their capacity aforesaid.
(3) Where the local authority have before the vesting date made arrangements for the making of financial adjustments, as between the accounts of the local authority in their capacity as authorised undertakers and any other account of the local authority, in respect of any other transaction or matter affecting both their functions as authorised undertakers and other functions of the authority, and in pursuance of those arrangements any amounts would, but for this Act, have fallen, on or after the vesting date, to be debited or credited in the accounts of the local authority in their capacity as authorised undertakers and credited, or, as the case may be, debited, in some other account of the local authority, the Central Authority shall, subject to the provisions of this Section, pay those amounts to the local authority or be entitled to receive those amounts from the authority, as the case may be, at the times at which, but for this Act, those amounts would have fallen to be debited or credited in the accounts of the local authority in their capacity aforesaid:
Provided that this Subsection shall not apply in relation to any apportionment of establishment charges between the accounts of the local authority in their capacity aforesaid and other accounts of the authority.
(4) The Central Authority and the local authority may agree or the Minister of Health may, on the application of either party in default of such agreement, determine that, having regard to the circumstances in which any such arrangements were made and the circumstances arising under this Act, the last foregoing Subsection shall not apply to those arrangements or shall apply thereto with such modifications as to the payments to be made by the Central Authority or the local authority as may be so agreed or determined, and the said Subsection shall have effect subject to any such agreement or determination.


Any other question arising under either of the two last foregoing Subsections as to the payments to be made thereunder shall, in default of agreement, be determined by the Minister of Health.
(5) Any payment made by the Central Authority or the local authority under the foregoing provisions of this Section which would, but for this Act, have been debited or credited as a capital payment, shall be deemed to be a capital payment, and any other such payment shall be deemed to be an annual payment.
This rather formidable looking Amendment is designed to achieve the following purpose. If hon. Members will glance at Clause 19 as it stands, I think they will agree that its provisions, as contained in Subsections (2) to (5) are appropriate only to the cases where local authorities have borrowed from outside. This Amendment is designed to deal with cases in which they have made advances as between their own undertakings, that is to say, if one undertaking of a local authority has advanced to another, or if advances have been made from a central consolidated fund, or from a mortgage loan pool, to the electricity undertaking. Such cases would not be dealt with by the Clause as it stands. What we are here seeking to do, therefore, is to put these internal loans, as I may call them—loans as between another branch of the local authority and its electricity branch—on precisely the same footing as external loans, so as to provide that they shall be serviced in exactly the same way as external loans. We therefore seek to leave out the provisions contained in the present Subsections (2) to (5), which are inappropriate in that they deal only with external loans, and to substitute for them the new Subsections contained in the Amendment, which cover both internal and external loans.

Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.

Question proposed, "That the proposed words be there added."

Mr. R. S. Hudson: I beg to move, as an Amendment to the proposed Amendment, in line 24, to leave out from the beginning to the end of line 26.
An earlier Amendment to Clause 13 was described by the Solicitor-General as a drafting Amendment, and I asked why such a very large number of lines were

only a drafting Amendment. He explained that Subsection (3) had been taken bodily out of Clause 14 and is later to be placed in Clause 19. He did not tell us that in the process an important proviso had been tacked on, and that is the proviso which we are now seeking to leave out. It reads:
Provided that this Subsection shall not apply in relation to any apportionment of establishment charges between the accounts of the local authority in their capacity aforesaid and other accounts of the authority.
We should very much like to know what is behind the insertion of the proviso, because I confess that I do not know sufficient about the details of local authority finance to be able to follow all its ramifications, but some members of local authorities are worried about this proviso, because whereas, the new Subsection seemed to give the local authority certain departmental arrangements which would result in extra finance to them, this new Clause provides only one extra source of finance, namely, the establishment charges. These local authorities believe, rightly or wrongly, that the terms depart from the Minister's proposals which will come up under subsequent Clauses to make an ex gratia payment of £5 million. I shall be glad of an explanation. It may be that this proposal merely opens the way for the new Clause, but the point needs to be cleared up. It is so complicated that I will leave it there to hear what explanation the Minister may give, and my other remarks may be more appropriately made when we come to consider one of the Amendments which we have down to the new Clause.

The Solicitor-General: I ought to apologise to the Committee for not making reference to that proviso, but frankly it slipped my mind. The object of the proviso is that if the Committee accept the new Clause to pay compensation to the tune of £5 million, the object of the proviso will be to prevent what will be, in effect, double payments to local authorities supposing, for example, in respect of the joint establishment charges, a sum is owed by the Central Authority to the central fund. Compensation in respect of that sum should not be paid both by the British Central Authority by way of servicing and also again as part of the apportionment of the £5 million compensation which is being paid by way of severance. What this actually does is to take out estab-


lishment charges from the sphere of Subsection (3)—which, as hon. Members will remember, provides for this cross-accounting, if I may so call it—in order to prevent a payment from being made under Subsection (3) in respect of what is in fact severance, and then another separate payment when the £5 million comes to be allocated to the various local authorities which have suffered loss in consequence of the severance.

9.30 p.m.

Mr. R. S. Hudson: That explanation will perhaps help other Members of the Committee; it has certainly helped me. Do I take it that we are using the two terms "establishment charges" and "severance" to indicate the same thing?

The Solicitor-General: The Solicitor-General indicated assent.

Amendment to the proposed Amendment negatived.

Proposed words there added.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

Major P. Roberts: I do not want this Clause to pass without making it quite clear that I, for one, am not satisfied that it gives a square deal to local authorities. I have held this view all along, particularly with regard to Sheffield, which I have the honour to represent. By paying some £5 million the Government would have in Sheffield in some five years' time an asset worth £11 million, and I am not at all satisfied that that is a fair deal. In point of fact, the council there, which has been a Socialist council, has for the last 20 years been paying £500,000 a year towards the reduction of its loan. If they had not done so they would be that amount better off. This principle will no doubt go through, but if local authorities and others follow it as a precedent in future in respect of gas or water, or whatever it may be, it will tend towards extravagance and maladministration. I did not want this Clause to pass without voicing that protest.

Lieut.-Colonel Elliot: I think my hon. and gallant Friend was well justified in the protest he has made, because the new Clause which the Minister is to introduce later on dealing with severance does not go to the root of the complaint which the local authorities have against those pro-

visions. What is more, the Association of Municipal Corporations and others have brought it very clearly to our notice, and to that of right hon. Gentlemen opposite, that they have the strongest objections to the insufficiency of the sum which is being allotted to deal with their problem—and only a portion of their problem at that. The main gravamen of their charge that under this Clause publicly-owned undertakings are not receiving a square deal when being taken over by another publicly-owned undertaking still remains. My hon. and gallant Friend has referred to the municipality of Sheffield where, as he says, a Socialist council was in power. A similar complaint was made by the town council of Glasgow, where again a Socialist authority was in power, and it was thought that for its own compensation alone a sum of £12 million should be allotted, which is more than twice as much as the entire global sum offered to the whole of the local authorities of Great Britain to deal with this problem.
We know the arguments in favour of it, of course. The first is that it has been debated at previous Labour conferences and that resolutions have been come to saying that one public body ought not to be compensated by another public body; secondly, that it is all going into the one pocket anyhow and is public money; and thirdly, that as the ratepayers have been paid already, it would be a mistake for them to be paid twice over.

Mr. Kirkwood: Save us from our friends. It is a waste of time.

Lieut.-Colonel Elliot: The hon. Member for Dumbarton Burghs (Mr. Kirkwood) has been for many years an honoured member of Glasgow town council. If he finds that the submission that Glasgow ought to be paid £12 million is a waste of time, all I can say is that he has forgotten not only his membership of Glasgow town council, but his good Scottish blood. The fact is that we are proposing in a relatively few minutes to deal with and to dismiss this question of the very large sums of money claimed by local councils in Scotland, Yorkshire—

Mr. Carmichael: The right hon. and gallant Gentleman ought to produce more substantial evidence of the request from Glasgow for this £12 million.

Lieut.-Colonel Elliot: I can quote the correspondence which I have had with Glasgow and the debates in the Glasgow authority. Does the hon. Gentleman suggest that Glasgow would not be very glad of £12 million?

Mr. Carmichael: That is not the point.

The Chairman (Major Milner): Neither is it in Order on the Question before the Committee.

Mr. Carmichael: It is important, because a public statement is being made that Glasgow town council want £12 million. I think I know the facts equally with the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot). He says that Glasgow, a Socialist-controlled municipality, is demanding from a Socialist Government £12 million. A statement of that kind should be substantiated in more solid a way than I have yet noticed.

Lieut.-Colonel Elliot: I am doing my best, as I said, to cut down to a minimum—

Mr. Kirkwood: The right hon. and gallant Gentleman's best is not very good tonight.

Lieut.-Colonel Elliot: If it were backed up by other Scottish Members, it would be better than it is. I am fighting a lone hand on behalf of Scotland. Indeed we on this side of the Committee are fighting a lone hand on behalf of all the municipalities, both Conservative and Socialist. I should like to reply briefly to the hon. Member for Bridgeton (Mr. Carmichael). Of course, when the whip has been lightly cracked with the authority of the Government, the demand, which has been vigorously made during the debates in the town council, has not been persisted in. I never heard that it was not unanimously supported, in spirit at least, by all the members that £12 million ought to be paid by the Government. I rest on this, that in addition to demands for specific sums, very large specific sums, which were made during the debates in the local authorities, the Association of Municipal Corporations itself—and this is something which the hon. Member for Bridge-ton will not deny—has communicated with us and with other Members of the House in the most formal manner, saying that they do not regard the sum proposed by the' Government as being in any way adequate as a settlement of their claim.

Mr. Carmichael: Yes.

Lieut.-Colonel Elliot: Then we are at one in saying that, in the opinion of the local authorities of Great Britain as a whole, the sum proposed is grossly inadequate. The exact scale of its inadequacy may be left to subsequent discussion when the hon. Gentleman and I meet outside the Committee. I am not anxious to do it in the Committee. This is the moment at which the Committee is deciding on the taking over of the assets of the local authorities upon what the local authorities themselves consider to be totally inadequate compensation. I have recapitulated very shortly the main arguments why it is said that these sums are inadequate. The contention which is being put forward is fallacious. It is a matter of bookkeeping which ought not to be persisted in. I think I carry hon. Members with me that that is a fair statement of the claim. What I consider that hon. and right hon. Members on that side of the Committee have not fully realised is that the great authorities have produced a sort of entity or corporate body of their own. They are not now merely satisfied with considerations of bookkeeping. They now regard themselves as great, real entities which are being destroyed. We shall have more to say about this at a later stage.
These great public enterprises—local government enterprises—which have built up great constructive schemes and under which hon. and right hon. Gentlemen in all parts of the Committee—particularly on the Government benches—learnt the technique of modern business enterprise and business management have acquired a personality all their own. The local authorities feel that the destruction of those corporate bodies—

Mr. Gallacher: Right out of Order, Sir.

Lieut.-Colonel Elliot: I thought there was only one Chairman.

Mr. Gallacher: It was outside long ago.

Lieut.-Colonel Elliot: I ask the hon. Member for West Fife (Mr. Gallacher) to appreciate that it is very difficult for me to limit this discussion, which I am trying to do, if I am to be led away into what might be called a rough and tumble across the Floor with the Communist Party. I am in no way unwilling to


embark on that but it would take time. Since both of us are Scotsmen, it would take a long time. Let us pass over it. The English ar quietly waiting until these discussions are passed.
The great local authorities consider that on this they are not having a square deal and that new psychological considerations have arisen which are not being taken into account by the Government of the day. This is merely one example of the Government, working on an arithmetical basis, totally failing to grasp and solve the real problems with which they will find themselves increasingly confronted when they press forward along the path which they have set themselves.

Several Hon Members: Several Hon Members rose—

The Chairman: I am sure the Committee do not want to embark on a long discussion at this stage.

Hon. Members: Why?

The Chairman: As the right hon. Gentleman said, there is a new Clause on this matter which has, indeed, already been discussed upstairs.

Mr. R. S. Hudson: May I respectfully point out to you, Major Milner, that this Clause has not been discussed at all in the earlier stages. We have had no discussion on local authority compensation—

Mr. Shinwell: There was, in Committee.

Mr. Hudson: —so far during the Report stage, because obviously this was the appropriate stage at which to discuss it. It is quite true, as you indicated, Major Milner, that there is a subsequent new Clause, but that Clause is of a very limited character and only deals with the allocation of the £5 million sterling. It does not deal with the major point of this Clause, which is to enable the Government to take over all the assets of the local authorities, merely paying them for the amount of their outstanding loans. With great respect, I suggest that as this Bill consists of two parts, one taking over private companies and the other taking over local authorities, it is reasonable that we should raise our voices here on behalf of the local authorities whose voices have in this matter been so very largely suppressed.

9.45 p.m.

Mr. Birch: I shall speak for only one moment to put our point of view. When

my right hon. and gallant Friend the Memberfor the Scottish Universities (Lieut.-Colonel Elliot) was speaking, he became rather entangled on the subject of Glasgow. Glasgow has a Socialist majority. Socialist majorities have responded against the interests of their towns to the crack of the Socialist whip, and whatever they may have thought, they have not seen lit generally to oppose the Bill. However, many local authorities have passed resolutions and forwarded them to the Ministry of Fuel and Power protesting against the way they have been treated. At least two have done it in my own constituency, and there is no doubt that many municipalities are suffering great financial loss. This procedure puts a premium on the improvident and the whole of Government legislation is tending to do that. We want to register our protest at the way the improvident have been treated, and at the way Socialist town councils are neglecting their duty to their constituents.

Hon. Members: Nonsense.

Colonel Clarke: I support what has been said regarding the losses that municipalities, particularly among local authorities, are suffering under the proposed provisions of this Bill. I saw some figures the other day regarding the 365 odd municipal undertakings. Out of 69 of them taken at random, 42 per cent. were losing half their assets; 35 per cent, were losing two-thirds of their assets; 10 per cent., three-quarters of the assets; 11 per cent., more than three-quarters of their assets without compensation. It is appalling. I want to emphasise again what has been said by the hon. Member for Flint (Mr. Birch), that the municipality run on sound financial lines is prejudiced in this case; that is to say, the municipality reducing its debt year by year will now be penalised compared with the one which is less provident.

Mr. R. S. Hudson: I would not have intervened, Major Milner, but for the interjection of the Minister, who seemed to indicate that he thought, because the question had been raised upstairs, there was no reason for raising it down here. If he will cast his mind back to what happened upstairs he will remember that in answer to suggestions by us that local authorities objected to this confiscation of their local electricity undertakings, the right hon. Gentleman said that the bodies


which spoke for the municipalities had raised no objection. Quite frankly, at the time it seemed to be a very strong argument, which I was not in a position to rebut, but I made certain inquiries subsequently and I found that on the occasion the vote regarding matters of this sort had been taken, it was on a purely party line, and that representatives of Socialist controlled municipalities had voted down representatives of Conservative municipalities who wanted to protest.
It is quite clear, in fact, that a number of authorities especially, as my hon. Friend behind me said, the more provident—in which I include my own constituency of Southport—will be penalised for the benefit of the Treasury compared with those who have been spendthrift. I gave the figures for Southport upstairs but, for the benefit of hon. Members who have not heard it down here, not only are the Government taking over the electrical undertaking of Southport, but they are also taking over the reserve fund. As it so happens, the reserve fund amounts almost exactly to the outstanding debt— £146,000 debt and £134,000 reserve fund. The net result of that is that the Government and the new central authority are taking over the Southport Corporation electricity undertaking for nothing.
Does anyone seriously suggest that anyone who has the interest of the ratepayers or the electricity consumers in Southport at heart is going to be pleased at the idea that this is to happen to an undertaking in which they take a great pride, and which has been built up over a series of years? Of course they are not. In the course of the next year or two, when it begins to dawn on local ratepayers and electricity consumers in towns which have the misfortune to have a Socialist majority what the Socialist Government have done, they are going to find this out to their cost. The time is coming when they will realise it, and it is intolerable that hon. Members should

think that there is no call for discussion of a Clause which is doing for municipalities what a Clause we discussed earlier does for public companies—depriving them of compensation except to a totally inadequate extent.

Sir Patrick Hannon: I wish to disclose at once that I have an interest in an electricity undertaking. The reason why I have not previously taken part in the Debate is because of my association with an electricity undertaking. This is a very important matter affecting the ratepayers of this country. It is planting upon them a measure of compensation which is wholly inadequate to the amount expened by the ratepayers in the organisation of electricity undertakings. In Birmingham we have one of the most successful electricity undertakings in the country and I challange hon. Members opposite who represent other constituencies in Birmingham to say that they are prepared to put an additional three shillings of four shillings on the rates by this means. I ask them to say how this figure has been arrived at. Was there consultation with the Association of Municipal Corporations, or with anyone competent to advise the Government on how this sum of £5 million has been fixed? I suggest this sum of £5 million to compensate municipal authorities for the amount they have expended in developing municipal undertakings is a travesty of fair play and fair dealing. This Clause should not be embodied in the Bill. The whole of this Bill is calculated from one stage to another to sacrifice the interest of this country for the development of an ideology introduced by His Majesty's Government for the first time in deplorable circumstances.

Motion made, and Question put, "That the Clause, as amended, stand part of the Bill."

The Committee divided: Ayes, 284; Noes, 99.

Division No. 286.
AYES.
[9.54 p.m.


Adams, Richard (Balham)
Ayles, W. H.
Benson, G


Adams, W T. (Hammersmith, South)
Ayrton Gould, Mrs B
Berry, H.


Allen, A. C. (Bosworth)
Bacon, Miss A
Beswick, F.


Alpass, J. H.
Baird, J.
Bing, G. H. C


Anderson, A. (Motherwell)
Balfour, A
Binns, J


Anderson, F. (Whitehaven
Barstow, P. G.
Blenkinsop, A.


Attewell, H. C.
Battley, J. R.
Blyton, W. R.


Austin, H. Lewis
Beattie, J. (Belfast, W.)
Bowden, Flg.-Offr. H. W


Awbery, S. S.
Bechervaise. A. E
Bowles, F. G (Nuneaton)




Braddock, Mrs. E M. (L'pl. Exch'ge)
Hobson, C. R.
Proctor, W. T.


Braddock, T. (Milcham)
Holman, P.
Pryde, D. J.


Bramall, E. A.
Holmes, H. E. (Hemsworth)
Pursey, Cmdr. H.


Brook, D. (Halifax)
Horse, G.
Randall, H. E


Brooks, T J. (Rothwell)
Hoy, J.
Ranger, J.


Brown, T J. (Ince)
Hubbard, T.
Reid T. (Swindon)


Buchanan, G.
Hudson, J. H. (Ealing, W.)
Rhodes, H.


Burke, W. A.
Hughes, Hector (Aberdeen, N.)
Ridealgh, Mrs. M.


Carmichael, James
Hutchinson, H. L. (Rusholme)
Roberts, Emrys (Merioneth)


Castle, Mrs. B. A.
Hynd, H. (Hackney, C.)
Roberts, Goronwy (Caernarvonshire)


Champion, A. J.
Hynd, J. B. (Attercliffe)
Robertson, J. J. (Berwick)


Chater, D.
Irving, W. J.
Rogers, G..H. R.


Chetwynd, G. R
Janner, B.
Ross, William (Kilmarnock)


Cobb, F. A.
Jay, D P. T.
Royle, C.


Cocks, F. S.
Jeger, G. (Winchester)
Sargood, R.


Collindridge, F.
Jeger, Dr. S. W. (St. Pancras, S.E.)
Scollan, T.


Collins, V. J.
Jones, D. T (Hartlepools)
Segal, Dr. S.


Caiman, Miss G. M.
Jones, Elwyn (Plaistow)
Shackleton, E. A. A


Comyns, Dr. L.
Jones, J. H. (Bolton)
Sharp, Granville


Corlett, Dr. J.
Jones, P. Asterley (Hitchin)
Shawcross, C. N. (Widnes)


Corvedale, Viscount
Keenan, W.
Shinwell Rt. Hon E


Cove, W. G.
King, E. M.
Shurmer, P


Crawley, A.
Kingdom, Sqn.-Ldr. E.
Silverman, J. (Erdington)


Daggar, G.
Kinley, J.
Simmons, C. J.


Daines, P.
Kirby, B. V.
Skefington, A, M.


Davies, Clement (Montgomery)
 Kirkwood, D.
Skeffington-Lodge, T. C


Davies, Edward (Burslem)
Lang, G. Lavers, S.
Skinnard, F W.


Davies, Harold (Leek)

Smith, C. (Colchester)


Davies, Hadyn (St. Pancras, S.W.)
Lee, F. (Hulme)
Smith, H. N. (Nottingham, S)


Davies, R. J. (Westhoughton)
Leonard, W
Smith, S. H. (Hull S. W.)


Davies, S. O (Merthyr)
Leslie, J R,
Solley, L. J.


Deer, G.
Lindgren, G S
Sorensen, R. W.


Delargy, H. J.
Logan, D. G
Soskice, Maj. Sir


Diamond, J.
Longden, F.
Sparks, J. A.


Dodds, N N
Lyne, A. W.
Stamford, W


Donovan, T.
McAdam, W.
Steele, T.


Driberg, T. E. N.
McEntee, V. La T.
Stephen, C.


Dugdale, J. (W. Bromwich)
McGhee, H G
Stewart, Michael (fulham, E.)


Dumpleton, C. W.
Mack, J. D.
Stross, Dr. B.


Durbin, E. F. M
McKay, J (Wallsend)
Stubbs. A E.


Edelman, M.
McKinlay, A. S.
Sylvester, G. 0.


Edwards, N. (Caerphilly)
Maclean, N (Govan)
Symonds, A. L.


Edwards, W. J. (Whitechapel)
McLeavy, F
Taylor, H. B. (Mansfield)


Evans, E. (Lowestoft)
Macpherson, T. (Romford)
Taylor, R. J. (Morpeth)


Evans, John (Ogmore)

Taylor, Dr S. (Barnet)


Evans, S. N (Wednesbury)
Mainwaring, W. H.
Thomas, D. E. (Aberdare)


Ewart, R.
Mallalieu, J. P. W
Thomas, I. O. (Wrekin)


Fairhurst, F
Mann, Mrs. J.
Thomas. George (Cardiff)


Farthing, W. J
Manning, Mrs. L, (Epping)
Thorneycroft, Harry (Clayton)


Fernyhough, E.
Marquand, H. A.
Thurtle, Ernest


Field, Capt. W J
Mathers, G
Tiffany, S.


Fletcher, E. G M (Islington, E.)
Medland, H. M
Timmons, J.


Follick, M.
Mellish, R. J.
Titterington, M. F


Foot, M M.
Middleton, Mrs. L.
Tolley, L.


Forman, J. C.
Mikardo, Ian
Tomlinson, Rt. Hon G


Freeman, Maj. J, (Watford)
Millington Wing-Comdr E. R
Turner-Samuels, M.


Gaitskell, H. T. N
Mitchison, G. R
Ungoed-Thomas, L


Gallacher, W.
Monslow, W.
Vernon, Maj W. F.


Ganley, Mrs C. S
Moody, A. S
Viant, S. P.


Gibbins, J.
Morgan, Dr H. B.
Walkden, E.


Gibson, C. W
Morley, R.
Walker, G. H.


Giizean, A.
Morris, Lt.-Col. H. (Sheffield, C)
Wallace, G. D, (Chislehurst)


Glanville, J. E. (Consett)
Mulvey, A.
Wallace, H W. (Walthamstow, E.)


Goodrich, H. E.
Murray, J. D
Watkins, T. E.


Gordon-Walker, P. C.
Nally, W.
Watson, W M.


Greenwood, A. W. J. (Haywood)
Neal, H (Claycross)
Webb, M. 'Bradford C.)


Grenfell, D. R.
Nichol, Mrs. M. E. (Bradford, N.)
Weitzman, D


Crey, C. F.
Nicholls, H. R. (Stratford)
West, D. G.


Grierson, E.
Noel-Baker, Capt. F, E. (Brentford)
White, H. (Derbyshire, N.E.)


Griffiths, D. (Rother Valley)
Noel-Baker, Rt. Hon P J (Derby)
Whiteley, Rt. Hon. W.


Griffiths, Rt. Hon. J (Llanelly)
Noel-Buxton, Lady
Wigg, Col, G. E.


Griffiths, W D. (Moss Side)
Oldfield, W. H.
Wilkins, W. A.


Guest, Dr. L. Haden
Oliver, G. H
Willey, F. T. (Sunderland)


Gunter, R J.
Orbach, M
Williams, J. L. (Kelvingrove)


Guy, W. H
Paget, R T.
Williams, Rt. Hon. T. (Don Valley)


Hale, Leslie
Paling, Rt. Hon. Wilfred (Wentworth)
Williams, W R. (Heston)


Hall, W. G.
Paling, Will T. (Dewsbury)
Willis, E.


Hamilton, Lieut.-Col. R.
Palmer, A. M. F
Wills. Mrs. E.A


Hannan, W (Maryhill)
Pargiter, G. A
Woodburn, A


Hardy, E. A.
Parker, J.
Wyatt, W.


Harrison, J.
Parkin, B T
Yates, V. F


Hastings, Dr Somerville
Paton, J. (Norwich)
Young, Sir R. (Newton)


Haworth, J
Pearson, A.
Younger, Hon. Kenneth


Henderson, A (Kingswinford)
Peart, Thomas F.
Zilliacus, K.


Henderson, Joseph (Ardwick)
Poole, Major Cecil (Lichfield)
TELLERS FOR THE AYES:


Herbison, Miss M.
Porter, G. (Leeds)
Mr. Snow and Mr. Popplewell


Hewitson, Capt. M
Price, M. Philips








NOES.


Amory, D. Heathcoat
Hannoh, Sir p. (Moseley)
O'Neill, Rt. Hon. Sir H


Assheton, Rt. Hon. R
Haughton, S. G.
Orr-Ewnig, l. L.


Astor, Hon. M.
Headlam, Lieut.-Col. Rt. Hon, Sir C
Osborne, C.


Baldwin, A, E.
Henderson, John (Cathcart)
Peto, Brig. C. H. M.


Bennett, Sir P,
Hinchingbrooke, Viscount
Pickthorn, K


Birch, Nigel
Hollis, M. C.
Ponsanby, Col. C. E.


Boles, Lt.-Col. D. C. (Wells;
Hudson, Rt. Hon. R. S (Southport)
Poole, O B. S. (Oswestry)


Bossom, A. C.
Hurd, A.
Prescott, Stanley


Bower, N.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Prior-Palmer, Brig. 0.


Boyd-Carpenter, J. A.
Hutchison, Col. J. Ft (Glasgow, C.)
Raikes, H. V.


Braithwaite, Lt.-Comdr. J. G.
Jarvis, Sir J
Reid, Rt. Hon. J. S C. (Hillhead)


Bromley-Davenport, Lt.-Col. W.
Keeling, E. H.
Roberts, Maj. P. G (Ecclesall)


Challen, C.
Lambert, Hon. G
Robinson, Wing-Comdr Roland


Clarke, Col. R. S.
Lancaster, Col. C. G
Ropner, Col. L.


Clifton-Brown, Lt.-Col. G.
Langford-Holt, J.
Ross, Sir R. D. (Londonderry)


Crosthwaite-Eyre, Col. O. E
Legge-Bourke, Maj. E. A. H
Sanderson, Sir F.


Crowder, Capt. John E
Lindsay, M. (Solihull)
Scott, Lord W.


Cuthbert, W. N.
Lipson, D L.
Smiles, Lt.-Col. Sir W


Davidson, Viscountess
Lucas-Tooth, Sir H.
Spearman, A. C. M


Digby, S. W
MacAndrew, Col. Sir C.
Spence, H. R.


Codds-Parker, A. D
Mackeson, Brig. H. R.
Stanley, Rt Hon. C


Donner, Sqn.-Ldr. P W.
Maclay, Hon J. S.
Sutcliffe, H.


Dower, Lt.-Col A. V. G. (Penrith)
Macpherson, N. (Dumfries)
Thorneycroft, G. E. P. (Monmouth)


Dower, E. L. G (Caithness)
Maitland, Comdr. J W.
Thornton-Kemsley C. N


Drayson, G. B.
Marples, A. E.
Thorp, Lt.-Col. R. A. F


Drewe, C.
Marshall, D. (Bodmin)
Vane, W. M. F.


Elliot, Rt. Hon. Walter
Marshall, S. H (Sutton)
Wakefield, Sir W. W.


Foster, J. G (Northwich)
Mellor, Sir J.
White, Sir D. (Fareham)


Fraser, H. C P. (Stone)
Molson, A. H E.
White, J. B. (Canterbury)


Fyfe, Rt Hon. Sir D P M
Morris, Hopkin (Carmarthen)
Williams, Gerald (Tonbridge)


Gage, C.
Morrison, Rt. Hon W. S (Cirencester)
York, C.


George, Maj. Rt. Hn G Lloyd (P'ke)
Mott-Radclyffe, C. E.



Grant, Lady
Neven-Spence, Sir B
TELLERS FOR THE NOES:


Gridley, Sir A
Noble, Comdr. A. H. P.
Mr. Studholme and Majo Conant.


Question, "That the Clause be read a Second time," put, and agreed to.

CLAUSE 20.—(Further compensation to local authorities in respect of capital works.)

Amendments made: In page 30, line 9, after "borrowed," insert "or advanced."

In line 16, leave out from "expenditure," to end of Clause, and add:
in respect of which the Central Authority are liable to make payments under Subsection (3) of the last foregoing Section."—[The Solicitor-General.]

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 21.—(Control of dividends, interest and other payments.)

Mr. Glenvil Hall: I beg to move, in page 33, line 8, at the end, to add:
(10) This Section shall, in relation to any composite company, have effect subject to the following modifications: —

(a) Subsections (i), (4) and (5) shall only apply to payments and distributions made, and redemptions carried out, before the vesting date;
(b) any liabilities arising under this Section shall be liabilities of the company and not of the directors; and
(c)any such liability shall be reduced by applying thereto the proportion ascertained under paragraph (6) of Subsection (1) of the Section (Compensation to composite companies) of this Act."

This Amendment is essential because, later on, we are going to approve two new Clauses which deal with splitting where composite companies are concerned, and this Amendment applies the provisions of this Clause to the new set-up to which I think the Committee will agree. There is one slight difference to which I might call attention, and that is that, although this Clause subjects the new composite companies to the same restrictions and limitations, a company, in this case, and not the directors, will be liable for any infringement of rights. Recovery will only be possible on that part of the assets which is attributable to the electricity undertaking, and not some other part, such as gas, water, or whatever it may be.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 22.—(Final payment of dividends and interest.)

Amendment made: In page 33, line 11, after "authority," insert "or a composite company."—[Mr. Shinwell.]

The Solicitor-General: I beg to move, in page 35, line 35, at the end, to insert:


(10) The following provisions shall have effect in the case of a composite company, that is to say:—

(a) no part of the cash and investments of the company representing the net revenue of the company for the final financial period shall vest by virtue of this Act in an Electricity Board;
(b) there shall be ascertained as soon as possible after the vesting date the amount required to enable the company to make payments of interest or dividend in respect of the final financial period on all their securities at the full rates permitted under the last foregoing Section, assuming that the statutory or other provisions relating to the company permitted payments of interest or dividend in respect of that period and due regard being had to any interest or interim dividend already paid in respect of that period; and
(c) if the total value of all the cash and investments referred to in paragraph (a) of this Subsection exceeds the amount ascertained under paragraph (b) of this Subsection, the company shall pay to the Central Authority such part of the excess as bears to the whole thereof the proportion ascertained under paragraph (b) of Subsection (i) of the Section (Compensation to composite companies) of this Act."

Mr. R. S. Hudson: I should like to have an explanation of this Amendment.

Mr. Glenvil Hall: Briefly, this Amendment deals with a Clause with which the Committee is not yet familiar, and that does, of course, make our proceedings a little difficult, and for it, in so far as I am responsible, I apologise. Broadly speaking. Clause 22 provides that, after the vesting date and a company having been dissolved, the stockholders' representatives shall pay the dividends and interests to those entitled to them. Here, of course, with the composite companies, there will be no stockholders' representative and the Minister will deal direct with the company concerned. This Amendment makes the necessary alterations in this Clause to provide for that fact.

Mr. Hudson: We are obliged to the right hon. Gentleman, but he will not be surprised if I comment on how much simpler this procedure is than the other, and how much better it would have been, and how much time would have been saved, if he had applied this simple procedure to all other companies, instead of confining it to composite companies.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 23.—(Income Tax provisions.)

Mr. Glenvil Hall: I beg to move, in page 36, line 14, after "authority," to insert, "or a composite company."
Here, again, this is a consequential Amendment to a Clause which has not yet been reached, but which I hope the Committee will accept when we do reach it.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 24.—(Re-opening of transactions resulting in dissipation of assets.)

Amendment made: In page 38, line 38, at end, insert:
(7) This Section shall, in relation to a composite company, only apply to transactions entered into by the company in their capacity as authorised undertakers, and the company, and not the directors, shall be made parties to applications under this Section.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 25.—(Provisions as to foreign investments.)

Mr. Glenvil Hall: I beg to move, in page 38, line 45, after "applies," to insert:
other than a composite company.

This, again, is consequential.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 26.—(Establishment of Electricity Arbitration Tribunal.)

The Solicitor-General: I beg to move, in page 39, line 40, to leave out Subsection (2), and to insert:
(2) The arbitration tribunal shall, as the Lord Chancellor may direct, either sit as a single tribunal or sit in two or more divisions, and shall, for the hearing of any proceedings, be constituted as follows: —

(a) one member shall be a person of legal experience and he shall be the president of the tribunal;
(b) there shall be two other members of whom one shall be a person of experience in business and the other shall be a person of experience in finance;
Provided that, in relation to any proceedings which, under the provisions of Subsection (4) of this Section, are required to be held in Scotland, the member who is a person of legal experience shall be a person of legal experience in Scotland.


(3) The members of the tribunal shall be appointed by the Lord Chancellor, except that any member or members appointed as being a person or persons of legal experience in Scotland shall be appointed by the Lord President of the Court of Session, and any member appointed by the Lord President shall only act in relation to proceedings which are required as aforesaid to be held in Scotland.
This Amendment is designed to carry out an undertaking given during the Committee stage of the discussions when we were looking at the Clause which deals with the constitution of the Arbitration Tribunal. Hon. Members then pressed me to accept the principle that the arbitration tribunal should sit, in case of need, in two or more divisions. As the Clause reads at the moment, only one division is provided for, and the Amendment carries out the undertaking which I gave to consider whether that would be possible by providing that there shall be power vested in the Lord Chancellor to direct that the tribunal shall sit in one or more divisions according to need.

Mr. J. Foster: I would like to ask the hon. and learned 'Solicitor-General what he has in mind in connection with the words "legal experience." It is usual to say in such a Clause that it must be a solicitor with so many years' experience. Has the hon. and learned Gentleman in mind persons other than barristers and solicitors, such as people who have been town clerks, and so on? Perhaps the Minister has a particular definition in mind.

Mr. Boyd-Carpenter: I am very glad that the Solicitor-General has moved this Amendment which, as he says, is in response to representations which were very strongly made in Committee. The only point I wish to make is that in resisting a very similar Amendment in Committee, he said that there would not be sufficient work to justify the tribunal sitting in two divisions. Does this change of front on the part of the Government mean that they have altered their view on that, and is there any reason now to apprehend that there will be more work than was then thought, and, if so, what will be the nature of that work?

Mr. Sidney Marshall: When the hon. and learned Solicitor-General is making his reply about the words "legal experience,"

perhaps he will also say what is meant by:
a person of experience in business
and by:
a person of experience in finance
I had an idea that they were closely associated. This is the first time that I have seen them so closely dissociated, and it would be interesting to hear the hon. and learned Gentleman give a definition of the two different classes.

The Solicitor-General: That is a real poser. In Committee today, I think I heard ah hon. Gentleman opposite, who is a member of a number of important companies, say that he had to have lessons from his accountant before he could face his shareholders with his accounts. He is a man of business with the greatest experience. The accountant, perhaps, was more experienced in finance. I think that that, perhaps is the best example I can give. With regard to the question asked by the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), we have no reason to apprehend that there will be more work now than we had in mind then. We have framed this Clause as an enabling Clause in case there is a sufficiency of work to occupy the tribunal sitting in one, two or more divisions. The Lord Chancellor is given power to appoint it in two or more divisions. As to the question about "legal experience," it is proposed that those appointed should be, at any rate, barristers or solicitors.

10.15 p.m.

Mr. R. S. Hudson: I am obliged to the Solicitor-General for this Amendment, which goes a considerable way towards meeting one of the points which we raised in Committee. I do not know whether it would save time, although I might be slightly out of Order, if I referred to one other point on this Clause to which we took exception in Committee, and that was in relation to Subsection (6). The Solicitor-General will remember that we said we thought the solution would be to give the Government or the Lord Chancellor power to set up a tribunal with sub-tribunals in order to get over the difficulty of entrusting the work to a single tribunal. They have met us to the extent of taking power to set up additional or sub-tribunals, and I am wondering if it has been due to an oversight that Subsection


(6) has been left in, or whether the Solicitor - General would consider at another stage omitting that Subsection.

The Solicitor-General: Unless my recollection plays me false, in the Committee I suggested that a good way out of the difficulty would be if we accepted the proposal that we made by hon. Members opposite that there should be power to appoint the tribunal in two or more divisions, and if, at the same time, we retained Subsection (6) which gives power to refer, because it might often be extremely convenient to use the power to refer particular matters to referees. If my memory does not play me false, the solution that I proposed, and which I understood was accepted by hon. Members opposite, was that we should have both— that we should have the power for a tribunal to be appointed to sit in two divisions, and, in case we wanted to use it, we should retain the power to refer matters under Subsection (6). However, I intend to look at the OFFICIAL REPORT in order to see if my recollection is wrong, although I do not think it is.

Mr. Boyd-Carpenter: If the Solicitor-General will look at column 840 in the OFFICIAL REPORT of the r8th day's proceedings, he will see that he submitted the procedure under Subsection (6) as an alternative to the proposal which we moved, and which is substantially the same as the Amendment which the Government are now moving.

Mr. R. S. Hudson: Perhaps I might be allowed to quote what the Solicitor-General said. He said at column 840:
What we have done is to try to adopt an alternative system."—[OFFICIAL REPORT, Standing Committee E; 1st May, 1947; c. 840.]
He regarded Subsection (6) as an alternative to our proposal. I do not wish to press the matter now, but perhaps the Solicitor-General will look into it and arrange for the necessary alteration to be made in another place.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 29.—(Determination of questions as to application of Part of this Act.)

Mr. Gaitskell: I beg to move, in page 43, line 24, to leave out from "body," to "this," in line 25, and to insert:

who in his opinion are a power station company or electricity holding company to whom.

This and the next three Amendments are consequential.

Amendment agreed to.

Consequential Amendments made.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 30.—(Power to obtain information.)

Mr. Gaitskell: I beg to move, in page 44, line 34, at the end, to add:
(2) Regulations made under this section shall make provision for the payment to any such body of expenses reasonably incurred by them in complying with any requirements made by or under the regulations.
This new Subsection which is to be added to Clause 30 enables bodies from whom information is sought by the Minister or Secretary of State or one of the electricity boards to have expenses paid that are reasonably incurred by the bodies concerned for obtaining the information the Minister or other persons require. This is in response to a request made by the Opposition during the Committee stage.

Mr. J. Foster: I would ask the Parliamentary Secretary who is to check whether the expenses have been properly incurred? Am I right in assuming that the Ministry will reimburse the costs where the Minister asks for information?

Mr. Gaitskell: Those are both points that will have to be dealt with in the regulations. I think myself that it would be proper that the Minister should reimburse the costs, where the Minister is seeking the information, and the electricity boards, where it is the electricity boards who are seeking the information.

Mr. J. Foster: I would ask your guidance, Major Milner. I should have thought that that did not come under the Money Resolution. The Parliamentary Secretary has just said that the costs will have to be paid by the Minister.

Mr. Gaitskell: They might be.

Mr. Foster: The hon. Gentleman said they should be; and, obviously, if you look at the Clause, Major Milner, no other body could pay them. The Clause says that the information can be obtained if asked for by the Minister or


Secretary of State or any electricity board; but in no part of the Money Resolution is there any indication that the Minister should reimburse expenses to a body. The Money Resolution in paragraph (c) states a number of persons whose expenses can be reimbursed, but to none of those bodies. I should like your guidance, on a point of Order, Major Milner, whether this is in Order, as coming within the Money Resolution.

Mr. Gaitskell: I only want to make it plain. I am sorry about this difficulty, if there is a difficulty, because we are only doing this to meet the views of hon. Members opposite. But I should like to point out that I did not say the Ministry would necessarily pay. I did offer an expression of opinion that it might. It is perfectly plain from Clause 30 that the information may reasonably be required by any electricity board, under paragraph (b). My attention has just been drawn to the fact that in the Money Resolution at the end—

Mr. Foster: Yes, sub-paragraph (vi) of paragraph (c).

Mr. Gaitskell: It states:
administrative expenses incurred by any Minister of the Crown or Government Department.
I think that meets the point.

Mr. Foster: Clearly, it does not cover all these costs. The Amendment says the exact opposite. It says regulations may be made under the Clause to make provision—
for the payment to any such body of expenses reasonably incurred by them
Sub-paragraph (vi) of paragraph (c) of the Money Resolution says:
the administrative expenses incurred under the said Act by any Minister of the Crown.
How in the world is an expense incurred by a body under that sub-paragraph? It can only apply if this Amendment is carried. But the Money Resolution does not allow the Amendment to be put in. If the Amendment is carried, the expenses which are incurred by the Board should be payable by the Minister and then, of course, they are incurred by the Minister in that sense. But that would mean that any Money Resolution would be useless. All that a Money Resolution would need would be, at the beginning,

words to the effect that it shall cover any expenses incurred by the Government. One could do anything in a Bill in that way, and say that the expenses are covered by the Money Resolution. That is nonsense.

The Chairman: I am inclined to think that the Amendment is in Order, and that the Money Resolution does cover the point. In any event, I understand that the Parliamentary Secretary has given his assurance that that is so.

Lieut.-Colonel Elliot: I do not mind government by assurance, but I do object to finance by assurance. I should have thought that the Minister's assurance, that he would find the money, is not quite enough for the House of Commons. We know that it caused the Minister a good deal of trouble—

The Chairman: It was not the Minister's assurance that he would find the money. He assured the Committee that he was advised by competent authority that the matter was within the Money Resolution, and I accept that assurance. As far as I can see, the Money Resolution is an extremely wide one, but if on further examination it turned out that the matter was not within the Resolution, then the question would arise again and there will be an opportunity for discussion at a later stage. I think that is the only way the matter can be dealt with on the spur of the moment.

Lieut.-Colonel Elliot: Could you tell us, Major Milner, for our guidance, on what occasion exactly could it be dealt with when the Bill has passed from this House? Because finance is the prerogative of this House. Surely, it would be out of order for an Amendment dealing with finance to be introduced in Tiother place? Or it that some amending legislation of one kind or another would need to be introduced? I think the explanations are a little unconvincing..

Mr. Glenvil Hall: The right hon. and gallant Gentleman knows very well what would happen. He has, I believe, occupied the position I now have the honour to occupy. He knows—none better—that one of two things would happen. If it was outside the Money Resolution the money would not be paid, it spite of what was said in the Bill; or, the Government of the day would take the first available opportunity to put the matter


right by moving another Money Resolution, which this House would or would not accept.

Lieut.-Colonel Elliot: That is to say, amending legislation; because, of course, once the Bill is on the Statute Book the Money Resolution cannot be altered. The right hon. Gentleman says, what is quite true, that we are discussing a matter which is of some interest to both of us, as we have both occupied the position of Financial Secretary. He is saying, in the first place, that he is not able to assure us that the money would in fact be paid. The right hon. Gentleman put that as a hypothesis—

Mr. Shinwell: The right hon. and gallant Gentleman put that forward.

Lieut.-Colonel Elliot: It was the Financial Secretary's hypothesis, if I may say so? I certainly do not wish to delay the Committee.—[Interruption.]—Really, we have co-operated with the Government whole-heartedly. It would be no difficulty at all to delay the proceedings, but we are not delaying them at all. We are dealing with a financial point made by my hon. Friend the Member for Northwich (Mr. J. Foster). It is of great importance to the House of Commons that financial business should not be conducted in a slipshod manner. We have the assurance of the Minister, but that does not go the whole way. Certainly he has indicated to the Committee the steps that would have to be taken if it were found, after all, that the solution he has put for ward was not an adequate one. That is an answer to my hon. Friend, whose point was very justly taken. It is quite right for a young Member to inform himself upon these matters when the Bill is before this House for consideration.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 34.—(Borrowing powers of Central Authority and Area Boards.)

Mr. Glenvil Hall: I beg to move, in page 47, line 33, after "authority," to insert:
in respect of severance or.
This is an Amendment preliminary to a proposed new Clause (Further compensation to local authorities in respect of severance)—with which we shall be deal-

ing later and which provides for the sum of £5 million to be paid to local authorities. This Amendment enables that money to be borrowed, if necessary.

Mr. R. S. Hudson: I have not had a chance to appreciate fully what the repercussions are. May we take it that acceptance of this Amendment will not prevent a full discussion of our case on the proposed new Clause, which, of course, will be based on the suggestion that severance should not be the only expenditure to be compensated for, and that the amount of £5 million is wholly inadequate, because a lot of other things should be included in the expenditure for which local authorities are to be compensated?

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 35.—(British Electricity Stock.)

10.30 p.m.

Mr. Glenvil Hall: I beg to move, in page 48, line 19, to leave out from "compensation," to end of line 21, and insert:
which, under any provision of this Act, is expressly required to be satisfied by the issue of stock.
This, again, is an Amendment in anticipation of the Committee's accepting the new Clauses with which we shall be dealing later. This particular Clause deals with British electricity stock and applies provisions to that stock which do not apply in the case of such companies at present.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 37.—(Treasury guarantees.)

Amendment made: In page 49, line 21, leave out from "satisfying," to "shall," in line 22, and insert:
any right to compensation which, under any provision of this Act, is expressly required to be satisfied by the issue of stock."—[Mr. Glenvil Hall.]

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 50(Application, amendment and repeal of enactments relating to electricity supply.)

The Solicitor-General: I beg to move, in page 61, line 28, to leave out from "undertakers," to "shall," in line 29, and to insert:


except enactments applicable to local authorities or composite companies otherwise than in their capacity as authorised undertakers.
This is an Amendment to a Clause which adapts to the Boards enactments which previously referred to undertakings. This effects a small amendment in Subsection (3). It provides that local enactments shall be adapted, other than those which refer to composite companies or local authorities in their capacity otherwise than as a statutory electricity undertaking.

Mr. R. S. Hudson: I am obliged to the hon. and learned Gentleman, but I am not sure that his description of this Amendment is absolutely accurate. I should have thought its object was to correct a mistake in Government drafting to which attention was called by the Opposition.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 59.—(Interpretation.)

The Solicitor-General: I beg to move, in page 67, line 44, to leave out from "the," to the end of line 47, and to insert:
bodies specified in the Schedule (Authorised undertakers to whom Part II of Act applies) to this Act, and any reference in this Act to the capacity of a local authority as authorised undertakers shall be construed as a reference to their capacity as a body authorised by any enactment to supply electricity in an area of supply.
This effects a slight alteration in respect of various undertakers rendered necessary by the new Clause on the Order Paper and of bodies to which Part II of the Act applies.

Amendment agreed to.

The Solicitor-General: I beg to move in page 68, line 9, at the end, to insert:
'electricity holding company 'has the meaning assigned to it by the section (Bodies to whom Part II of Act applies) of this Act.
This is an amendment of definition consequential upon the introduction of the new Clause.

Amendment agreed to.

Further Amendments made: In page 69, line 7, at end, insert:
'holding company' shall be construed in accordance with the definition contained in any Act of the present Session amending the law relating to companies.

In page 70, line 19, leave out from first "company," to end of line 22, and insert:

has the meaning assigned to it by the section (Bodies to whom Part II of Act applies) of this Act.

In line 38, at end, to insert:
'subsidiary company' shall be construed in accordance with the definition contained in any Act of the present Session amending the law relating to companies."—[Mr. Glenvil Hall.]

Clause, as amended, ordered to stand part of the Bill.

NEW CLAUSE.—(Further compensation to local authorities in respect of severance.)

There shall be paid by the Central Authority to local authorities, by way of compensation in respect of the severance of their electricity undertakings from their other activities, the sum of five million pounds, and the said sum shall be divided among such of the said local authorities as satisfy the prescribed conditions, and the amounts to be paid to the individual authorities shall be determined in such manner and in accordance with such principles as may be prescribed.—[Mr. Glenvil Hall.]

Brought up, and read the First time.

Mr. Glenvil Hall: I beg to move, "That the Clause be read a Second time."
This is a Clause to which the Committee may perhaps desire to give some consideration. It has created a considerable amount of interest in all quarters of the Committee and among local authorities outside. It proposes to set aside £5 million to compensate local authorities for the severance of the electricity undertakings which, under this Bill, are to be taken from them and vested in the Central Electricity Authority. It also provides for the promulgation later on of regulations which will deal with distribution. Right hon. and hon. Members may ask why we want to make this provision. It arises partly out of a promise given by my right hon. Friend the Minister of Fuel and Power when we dealt with this matter in Committee upstairs. The question was raised by hon. Members on the other side of the Committee, as well as on this side, and local authorities have represented to them and to my right hon. Friend that when they lose their electricity undertakings, some of them will be involved in losses of one kind or another. It is their suggestion that provision should be made for what might be described as legitimate losses for which compensation should be paid.


These losses, I think, can be listed under five heads. First, loss to the rates; that is, the loss of right to use the profits of an undertaking in the relief of rates. Secondly, loss of the benefit of income tax set-off—a new loss which, in the case of local authorities, has only accrued in recent years. Thirdly, there is loss of contributions towards central establishment charges and other overheads, and then, to a lesser degree, there is the loss that may result from the unbalancing of superannuation funds owing to loss of staff the taking away of an electricity undertaking. Then there has been a loss —or so some of them say—resulting from local authorities being left to bear management expenses on loans raised for their electricity undertakings.
Before I come to the main items let me say that so far as the last two items are concerned they are adequately covered in the Bill or by Amendments made by my right hon. Friend during the passage of the Bill through the House. Superannuation is covered under Clause 48, which deals with the provision of pension rights. Clause 19 deals with the compensation to local authorities to cover loan charges as, of course, the Committee know very well, because we dealt with it and argued about it half an hour ago. Now what about the others ? First of all, there is the contribution to rates. It is true that, within limits, a local authority which has an electricity undertaking can so arrange its affairs that its electricity undertaking can make a contribution, and sometimes a substantial contribution, in aid of the local rates. Some authorities, we find, do this regularly, others occasionally and many, not at all. Some in fact, instead of helping the rates by paying over yearly a part of the profits made on their electricity undertaking, actually have to receive a subvention from the rates to assist their electricity undertaking, I have figures here which, I hope, will interest the Committee and which give a good picture of just what is involved under this particular head. There are 74 who are assisting the rates to the tune of £309,000 and, on the other side, there are 10 who receive aid from the rates to the tune of £230,000. They do not, of course, actually balance but when you take one from the other the difference is only a matter of £80,000.

Sir P. Hannon: I assume these are aggregate figures covering the whole 188, one way or the other?

Mr. Glenvil Hall: The point I am making—and I think the Committee would like to be quite clear about this— is that when it comes to the question of the rates being helped by the municipally owned electricity undertakings, the vast majority of them do not get anything out of it at all. In 10 cases the rates have to go to the aid of the electricity undertaking to the extent, in bulk, in 1942–43 of £230,000. On the other hand, to be quite fair, there were 74 local authorities who did assist the local rates to the tune of £309,000 and it is not to be wondered at, at first blush, that those who have been enjoying that help should feel that something should be done if we are to take the electricity undertaking from them and that help to the rates is to come to an end. It is the Government's view that, whatever other help should be given, it is quite impossible, on grounds of policy apart from anything else that we should assist local authorities who, when this transfer takes place, are going to lose help from the rates. In the last analysis, when one authority regulates its activities so closely that it either ploughs back what it makes into the electricity undertaking or passes the profit on to the consumer of electricity, it would be wrong for us when dividing up any sum which may be provided by Parliament, to take into account the fact that other authorities are charging their consumers more than they need and assisting the rate's. We should only be helping the ratepayers at the expense of the consumer, and I hope that the Committee will share that view and agree with us that, whatever else should be compensated for when severance takes place, we cannot compensate for loss of aid to the rates.
10.45 p.m.
Now what about the Income Tax setoff? It is only in the last year or two that local authorities have been able to enjoy what all individuals have enjoyed for quite a long time, the setting off of any interest which they pay on loans against Income Tax which, year by year, they pay to the Inland Revenue. The fact that this concession has now been broadened out and may be applied to local authorities has meant that certain local authorities now say that, when they


come to lose their electricity undertaking, their inability in future to make this set off against their other trading activities will entail a loss. This obviously comes into a slightly different category from that in which we put the direct loss to the rates; and although we do not recognise it as of prime importance in the claims put forward on behalf of local authorities, we agree that, in some instances at any rate, there will definitely be a loss. It is true that where there are local authorities with many trading activities, this question of the set off of Income Tax can make a considerable difference in the course of the year.
Now for a few moments let me deal with what we think is the main grounds upon which local authorities should be assessed when severance takes place, and that is the loss of contribution to central establishment charges which they will undoubtedly suffer. The losses under this head will quite obviously be general, whereas in the previous categories I have spoken about, losses will vary from local authority to local authority. It is obvious that all local authorities that have, at the moment, electricity undertakings, will, when they lose it suffer a loss of contributions from that undertaking to the central establishment charges of the local authority. Trading undertakings make an agreed contribution to the local authorities in respect of legal assistance, house room, office accommodation, and of help given by the engineering department. Usually the finance office also assists the electricity undertaking, which pays to the local authority to which it belongs a sum to cover overheads of that kind, and legitimately so. Severance will mean that these overheads will have to be spread over a smaller number of departments and activities carried on by the local authority and, as I say, we do feel that there is legitimate ground for complaint and for compensation. Now, as we see it, and I hope I carry right hon. and hon. Gentlemen opposite with me, this loss of overheads, in respect of establishment charges, will not be a permanent loss—in our view it is a loss which can be tapered off gradually. Accommodation, for instance, if it is not wanted, can be given up to other people who can use it, who will, undoubtedly, pay rent

for it. But we have made inquiries and we have found that the estimated loss by local authorities 'Under this particular head is between half a million and one million pounds per year. That would be the rate of loss at present. But as staff is transferred, office accommodation is given up, and other arrangements are made, the loss would be a diminishing one.
We have assumed that the loss is something between half a million and a million pounds a year. What my right hon. Friend has done is this: he has taken the figure presented to him on behalf of the Association of Municipal Corporations and suggested that the round figure of £5 million—roughly five years at one million pounds a year, taking the basic figure as one million, not the lower of half a million in respect of severance charges under this particular head—would be doing justice to the local authorities.

Mr. Lipson: May I ask the right hon. Gentleman a question? He is not making the point, is he, that the sum of £5 million for severance is acceptable to the Association of Municipal Corporations?

Mr. R. S. Hudson: I was just about to ask the same question. The sum suggested by the Association of Municipal Corporations, I take it, is the half million and the million pounds and not the £5 million?

Mr. Glenvil Hall: I am very happy to be corrected. I am very sorry. So far as we can gather amongst municipalities the present loss from severance under this head would be approximately from half to a million pounds a year and I was taking that figure and that was the sense in which I meant to use the phrase. I was not suggesting for a moment that we carried the whole of the municipalities of this country with us in our suggestion that the compensation to be divided between those who are to lose their electricity undertakings should be a sum of £5 million. I was trying to explain that on a rough and ready basis we were assuming that over the period' of five years most of these undertakings could so readjust their activities as to absorb their staff. And I may say, by way of parenthesis, some of the staff, at any rate, will pass with the electricity undertaking to the Central Electricity Authority.

Sir P. Hannon: Will the right hon. Gentleman forgive me for one moment? I apologise for having to interrupt him. What was the scope of the inquiry which was made here? Did consultations take place in arriving at this sum and were the Association of Municipal Corporations excluded from that inquiry?

Mr. Glenvil Hall: Very much otherwise. We have been very closely in touch with the Association. I would like to take this opportunity—I intended to do this at a later stage but the hon. Gentleman has given me the opportunity now—on behalf of His Majesty's Government to pay a tribute to the officials and representatives of the Association who have been most co-operative and helpful in this matter. We are anxious to see that justice is done, and we have been in very close touch with that body. Far from excluding them, the actual reverse has been the case. I do not want to mislead the Committee by pretending that the Association agreed to this sum. It is the sum we suggested, and in our view, if the agreed basic figure is taken over a period of five years, the resultant sum is adequate to compensate for most of the losses which the authorities will suffer, not taking account of losses in aid to the rates.
It might be convenient if I dealt here with how this sum is to be distributed. In the Clause we leave that to regulations to be made by my right hon. Friend the Minister. The reason why it is left for regulations to be made later is in the hope that we can come to some arrangement with the Association of Municipal Corporations. I freely confess to the Committee that we have not yet been able to find a formula which entirely meets their wishes. Various bases have been explored. Should we adopt units sold as the basis, or revenue earned, or a combination of the two, or management expenses that is charges allowed by the Inland Revenue under Rule 36, which, I am sure, are familiar to everyone here who is also interested in municipal life.
Unfortunately—I am sorry to say this —although every effort has been made by both sides, agreement has not yet been reached as to the best formula by which this money can be distributed amongst those who will be entitled to it. The fact is that regulations have to be made. They can be and will be made, but my

right hon. Friend does for the moment leave the matter open. I can assure the Committee that we shall lose no time in our efforts to try and reach agreement with the local authorities.
To sum up—it seems to us a hopeless task to try to apportion, adequately, absolutely and exactly, compensation according to the precise degree of loss resulting from severance. We can only do rough justice and take what we think are legitimate claims, assess them and then distribute an equitable sum according to-a formula yet to be devised. There are some 350 separate cases and if we had to fight each one of them through the often-suggested method of an independent tribunal it would take a very long time. It would be much better, if we possibly can, to fix a sum and -then agree, if we can, on the method by which it should be distributed. One thing I would ask the Committee to remember in all seriousness, in the discussion that will follow the introduction of this new Clause, is that there is to be a revision of the block grant. There will be new block grant proposals partly as the result of the transference of the health services under the Act familiar to us all. Many authorities will benefit very greatly at the expense of the Exchequer by the changes that these proposals will bring and so the general level of rates throughout the country will appreciably be reduced. This new block grant will take all sorts of things into calculation, though not, as such, the loss from severance. But when severance has taken place the new block grant will even out the rate level between authorities whatever the reason for the differences may be.
If the Committee would remember that and realise that my right hon. Friend has done his best on the information available, I think we can give, at any rate, rough justice to the local authorities who are losing these undertakings. If they realise that, and agree to this Clause, I am sure local authorities will in the end realise we have done our best, and will accept the Committee's decision.

11.0 p.m.

Mr. Hobson: I fully appreciate the representations that have been made by the Association of Municipal Corporations and it is true to say that £5 million divided among the 350 local authorities is not going


to allow them very much. It is not always appreciated that many local authorities have paid the charges on such things as their library services from their lighting funds. Great play has been made about authorities which subsidise their rates through electricity undertakings, but those which have subsidised to the greatest extent are those authorities which possess selective stations and are able to take advantage of Sections 12 and 13 of the 1926 Act—which are repealed in the Schedule to this Bill—and have been able to exploit the authorities which have not got selective stations. That is where they have got the surplus revenue to subsidise their rates.
A further point which has been overlooked is this. Electricity consumers and ratepayers are not necessarily synonymous. Therefore, I think the Government are being exceedingly generous. But I would far rather they had left the Bill in its original form. I am rather surprised that the Minister has been persuaded by the representations that have been made, because I know there are people who argue that because compensation was given to stock holders compensation should be given to the local authorities. But these people fail to realise the fact that under the Act of 1882 and the Act of 1896 it was presupposed that electricity would be publicly owned and that the local authorities did not enter the electricity business for the sake of making profit. Why, therefore, do they at this late hour wish to make a profit? I am very surprised that the Minister has seen fit to pay £5 million. I appreciate this is an unpopular view but, nevertheless, the fact remains that it is the consumer who is going to pay the extra charges. Therefore I would much rather have seen the Bill in its original form.

Mr. R. S. Hudson: I do not know whether it would be for the convenience of the House if I move my Amendment formally at this stage, because the Whole thing could then be discussed in one instead of leaving it to two discussions.

The Chairman: That may he done if the Clause is read a Second time.

Mr. R. S. Hudson: I beg to move, as an Amendment to the proposed Clause, in line 3, to leave out from "activities," to the end of Clause, and to add.
such respective sums as may be agreed or, in default of agreement, determined by arbitration under this Act, as fair compensation for the net losses likely to be suffered by those local authorities respectively by way of overhead expenses or establishment charges in consequence of the passing of this Act.
The right hon. Gentleman in introducing this new Clause said that it had been received with considerable interest by local authorities. I think he is a master of under-statement. I should have said it was received with considerable indignation by a large number of local authorities. We have two objections to the Clause as it stands. In the first place, the amount is, in our view, inadequate. The right hon. Gentleman described it as being rough justice. He went on to say that he thought the full figure of the loss by severance at the present moment might be somewhere between half a million and one million sterling a year and that that loss was not likely to continue for very long. But he gave no substantial grounds for that and I do not think it necessarily follows.
The hon. Member for Wimbledon (Mr. Palmer) in a book he wrote a little while ago called "The Future of Electricity Supply" pointed out very cogently the results that would be likely to accrue to local authorities. He pointed out that the borough electrical engineer often performed a number of supplementary functions, and that if that particular official was to be taken away, it did not mean that these other functions did not have to be performed, but only that another official had to be appointed by the local authority to perform them. That seems to me largely to weaken the point made by the Financial Secretary. These functions are not necessarily going to disappear. Oh the contrary, a certain number—not perhaps all—are bound to continue, and to that extent the expenditure by the local authority is going to continue. It may not continue to the extent of £1 million a year, but it is going to continue at a substantial level, and to say that the whole of the expenditure is going to come to an end, or can be absorbed, in five years does not represent the state of affairs as we know them now or as they are likely to develop.
He talked about the fact that a certain number of local authorities, 74 I think, help the rates from their electricity undertakings, and that 10 help the electricity undertakings from the rates, and he seemed to think it was unnecessary to take into account the potential help to the rates which was going to come to an end. That may sound all right here, where none of us are immediately concerned, but it is not going to be much consolation to the ratepayers in the 74 authorities who have seen their rates reduced to the extent of £300,000 a year. Over 20 years that amounts to a sum of the order of £6 million.
I merely quote those two figures to show how inadequate the sum of £5 million is. As far as the Income Tax set off is concerned it is quite true that this has only been enjoyed of recent years, but it would have been enjoyed on an ever-expanding scale in years to come, and again this is a very definite loss to the rates. Therefore, it is not surprising that the local authorities are not pleased with the situation. I am bound to say that I heard with the greatest surprise the right hon. Gentleman say that the Government had been very closely in touch with the Association of Municipal Corporations. My information is very different. The right hon. Gentleman said, in answer to an inquiry by myself and my hon. Friend the Member for Cheltenham (Mr. Lipson), that it was only the figure of £500,000 to £1 million a year that the association set before them. But there has been, so far as we can gather, no discussion at all.

Mr. Shinwell: Nonsense. Where does the right hon. Gentleman get his information from?

Mr. Hudson: The right hon. Gentleman with his normal courtesy, says, "nonsense"

Mr. Shinwell: It is nonsense. I say it is nonsense.

Hon. Members: Get up and say it.

Mr. Gallacher: Shut up.

Mr. Hudson: Perhaps the Committee, since the right hon. Gentleman makes this statement, will bear with me while I read a letter from the secretary of the Association of Municipal Corporations. I am

not usually in the habit of making statements without documentary proof.
He says:
I would like to give some further information on the subject of the £5 million now to be included for further compensation to local authorities. You will remember that the Minister made a statement in Standing Committee on 17th April. This was made without any prior consultation, with my association.
On 17th April the right hon. Gentleman made his statement without any prior consultations with the Association of Municipal Corporations.
We were given no opportunity of expressing our views as to the suitability of the amount proposed to be included in the Bill.
This is what the right hon. Gentleman calls full discussion and consultation.
An appropriate Government amendment now stands on the Order Paper in the name of Mr. Shinwell. In the interval my Association have had no opportunity of expressing their views on the adequacy of this sum to the Minister.
This is what the right hon. Gentleman calls full discussion and consultation.

Mr. McKinlay: Will the right hon. Gentleman say if the letter he quotes was sent to him in his capacity as a member of this House, and was a similar letter sent to other members drawing attention to the Minister's conduct?

11.15 p.m.

Mr. R. S. Hudson: I am merely responsible for this letter which was sent to my hon. Friend the Member for Wavertree (Mr. Raikes) in his capacity as a member of the Association of Municipal Corporations.
No views have been presented by my Association because, although they have asked for an opportunity to discuss the £5 million and the method by which it is ascertained, this request has not been granted.
Nothing could be more categorical than that and nothing could destroy more the statement of the right hon. Gentleman that he was in close touch with the Association of Municipal Corporation and I venture to say it backs up my statement which he challenges that no effective discussions have taken place. It is clear that, in fact, the Association have neither had any discussion as to the adequacy of the amount nor as to the method of its distribution.
Now I come to the other objection we have to this Clause and that is to its form. The form of the Clause, it will be realised, is
The said sum shall be divided among such of the said local authorities as satisfy the prescribed conditions, and the amounts to be paid to the individual authority shall be determined in such manner and in accordance with such principles as may be prescribed.
The right hon. Gentleman earlier today had occasion to reprove us, saying that a little knowledge was a dangerous thing. It is a little unfortunate he chooses to do that today, for how little knowledge he had when speaking in Committee. I will now read to the right hon. Gentleman what he said in Committee on 17th April. The Committee will remember that the right hon. Gentleman, the Financial Secretary, explained that it was impossible to provide any other wording than this because they had failed to find a formula satisfactory for the distribution of this money. What does the Minister say on 17th April? Does he remember? He says:
I do not anticipate any difficulty about finding the Board … on the question of severance … I have had to consider, before the Bill becomes an Act of Parliament, the nature of the organisation to be set up. We have to use as much of the existing organisation, administrative and technical, as if possible when the change is effected.
He went on to refer to the question of the £5 million:
As to its distribution, basis of payment, etc., these are matters which will have to be considered in consultation with the local authorities. I do not anticipate any difficulty about that."—[OFFICIAL REPORT, Standing Committee E, 17th April 1947, c. 647–649.]
In other words, in April he said that he would have no difficulty, that he did not anticipate any difficulty, in providing a formula; and yet, two months later, he comes to the House and asks us to pass a Clause which, in effect, confesses that he has not been able to find a formula; that he has not been able to reach agreement with the local authorities, and that the whole thing is to be left in the air.

Mr. Shinwell: Just wait and see.

Mr. Hudson: Just wait and see, says the right hon. Gentleman. I am going to wait and see. What I suggest is that this shows a gross incompetence on his

part. We have put forward an alternative. We believe that if we are to deprive the local authorities of these resources, the proper way is to compensate them; and if the only way to secure justice is to compensate them one by one. then that is the procedure which should be followed, even though it may involve some delay. As I said when we were discussing compensation for shareholders. I am certain that if we put the choice to the local authorities whether they preferred the Clause as it stands—not knowing what share they were going to get of what everyone admits is an inadequate sum, namely, £5 million—or whether they would prefer to wait a short time in order to receive eventually a sum based on an accurate assessment of the losses they are going to sustain, there can be no question which any sensible local authorities would choose. Every time they would choose our Amendment rather than the Clause as it now stands.

Mr. Blyton: From the information I have, the Association of Municipal Corporations would have been quite satisfied had they received £10 million for seven years. But never at any time have they argued that they should have any compensation for the loss of capital assets. It was known by the Association of Municipal Corporations that £15 million was the figure to be asked for; but eventually it was got down to £10 million, and therefore the difference between the Association of Municipal Corporations and the Government is not a question of compensation for capital assets, but the question of a sum of money for what they term the severance because of the loss of their undertakings.
I want to disagree entirely with the hon. Member for North Wembley (Mr. Hobson), who has now left the House. The Bill provides that the local authority can, out of its surplus, take I½ per cent. of its profit so long as its reserve is one-twentieth of its capital expenditure. It is no use winking at the fact that there are local authorities—and Socialist local authorities—who have taken from their surplus, most particularly in the distressed areas of the North-East, where the rates are very high. Therefore, no charge can be levelled against those of us who have had to face difficult obligations in relation to finance in trying to keep the rates down, by saying we have no regard for


the electricity consumers of our areas. In my constituency they have as cheap electricity as there is in any part of this country for lighting, heating and power, and they have been able last year to contribute to their rates 8½d. in the pound. That is no mean figure when one considers that the area has a rate of nearly 20s. in the pound.
It is all right to talk of wealthy areas where the rate is about 11S. in the pound, but it is quite a different matter when the rate is nearly 20s. This town has been able to help its rates, but the biggest help has been the Income Tax set-off. It was a terrific fight against the Treasury, a fight which finished in the House of Lords. In Sunderland last year over £16,000 was contributed to the rates from Income Tax set-off alone. While local authorities are not complaining of the loss of their selected stations, they are concerned about the next financial year when they will lose this income which would help their rates. Therefore, in supporting the new Clause, I shall do so purely because, with the £5 million, which is a considerable advance on what was to be given during the Second Reading of this Bill, and which was asked for in the Committee stage, we shall be largely helped. We are getting £5 million and, with the promise of the revision of the block grant next year, there will be an easing of the financial burden which we face in our areas. I shall be satisfied to go into the Division Lobby tonight to support the new Clause, knowing that what we have lost in respect of the Income Tax set-off will be more than equalled by the block grant next year.

Mr. Carmichael: I would like to say a word about local authorities meeting certain charges, and I would refer to Glasgow Corporation, which has one of the largest electricity undertakings in the country. At no time was any of the revenue directed towards the reducing of the rates. They ploughed the money back into the concern and likewise aided the consumers of electricity in that area; and I think the Financial Secretary made a fair statement on the position in regard to certain authorities that when they are taken over a loss will result. In the case of pensions, in Glasgow alone the sum is in the region of £4,000. The total figure for Glasgow will be in the region of £112,000 per annum. It is quite true that

for certain of these charges it will be a reduced sum in succeeding years, but £112,000 is, I think, a formidable figure. I want to make that, clear because the statement has been made tonight that Glasgow was looking for a sum of something like £12 million.
At no time to my knowledge did Glasgow make any representations of any kind. Glasgow Corporation was of opinion from the very beginning that if the Government decided to take their electricity undertaking under a nationalisation scheme, it was going to serve the community in Glasgow as well as it did under the local authority. They went further and held the view that the undertaking would in the long run be more beneficial under the Government than under the local authority because it would spread the financial responsibility over a greater number of heads. I have no idea how the £5 million has been arrived at. I have no knowledge of the consultations.
I cannot agree that- the figure is good or bad. Apparently, some of my hon. Friends are satisfied that they could give a better figure but they give no reason. Therefore, I am satisfied that the figure was not blindly got out. For something like two years, in common with other Members of this House, I have watched the activities of the Government, and I have no reason to believe that their conduct, up to now, has been such that I have to disbelieve any statement they make.
It should be understood that my opposition, if I have any, is not with the desire to gain any political capital, but I would like to know what methods have been adopted up to now to get a proper understanding of the requirements of local authorities? What have been the approaches to local authorities in Scotland? Are they involved in this general scheme? I ask that because I do not think we can get any clarity while some hon. Members think in terms of assessing the rating problem. I agree that if you can get 8½d. off the rates as a result of the revenue from an electricity undertaking, that that is constantly in mind when compensation is discussed. It is quite impossible to arrive at a reasonable figure with all the undertakings because of their varying claims and I feel—I do not make a parochial request of this—that the representations of the Scottish authorities cannot succeed because their rate problems


are entirely different. It should be possible to get some understanding quickly as to the sum involved without involving them with all the municipalities up and down the country.
11.30 p.m.
I understand that this £5 million will be allocated after a formula has been worked out and issued in regulations. Surely at this hour it would be possible to have some kind of discussion with the municipalities prior to the making of regulations. From the point of view of administration, I think that you might consider at least discussing the financial position with the Scottish local authorities by themselves. I do not press this unduly because I do not know the machinery involved, but from past experience in other matters it has been quite useful. I am supporting the Clause and I would go further and say I am satisfied—and I hope the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) will note— that I have the backing of the Socialist municipality of Glasgow. It is necessary to say that because there is a great danger that the right hon. and gallant Gentleman is leaving a wrong impression with the House about the position of Glasgow.

The Deputy-Chairman: Mr. Raikes.

Mr. McKinlay: On a point of Order. The right hon. Member who moved this Amendment drew the attention of the Committee to the fact that the hon. Member for Wavertree (Mr. Raikes) was an officer of the Municipal Corporations Association. If the hon. Gentleman is an officer of the association, is he going to declare his interest?

The Deputy-Chairman: The hon. Member must wait and hear what the hon. Member says.

Mr. McKinlay: Further to that point of Order. This is not the first stage of the proceedings of this Bill. I am informed that no declaration has been made in Committee.

The Deputy-Chairman: I am concerned only with the proceedings now and not what happened before.

Dr. Morgan: With due respect, Mr. Beaumont, am I to understand from you that on a point of great

importance involving a Member's interest in a Bill, you are ruling definitely on proceedings tonight, not having regard to the fact that it is alleged that in previous discussions on the Bill the hon. Member has spoken and not disclosed his interest?

The Deputy-Chairman: It is quite impossible for me to judge that matter because I am not aware of what occurred before. We must wait and see.

Mr. Gallacher: If I committed anything which was suspected of being an offence, what a howl there would be from the other side. If there is any question at all that the hon. Member has acted in a way that is not in keeping with the recognised rules and procedure of the House, if there is any doubt, he should not be allowed to speak further on the Bill until that doubt has been effectively settled.

The Deputy-Chairman: So far, the hon. Member for Wavertree (Mr. Raikes) has not said anything at all and, therefore, he is completely in Order. I now call upon the hon. Member for Wavertree to speak.

Mr. James Hudson: With great respect, I was a member of the Committee and heard the speeches, being quite a regular attendant, and, as you say, Mr. Beaumont, we have not had information upon the point. I want to assure you that there has been no revealing up to this stage of the point which has only come out in the House tonight regarding the hon. Member's special connection with the organisation that we are now discussing. I put it to you that the hon. Gentleman has discussed this matter in Committee without any knowledge being given of his special interest.

The Deputy-Chairman: The one thing that seems to be very well known to hon. Members is the interest of the hon. Member for Wavertree. I have no knowledge of this, but even if he does not declare his interest, he is still entitled to speak.

Mr. Raikes: After all this discussion, I am afraid I shall have to dispel the anxieties and fears of certain hon. Members opposite. It is a duty that any Member discussing any Measure in which he has any financial connection should disclose that financial


interest. I have no financial interest whatever. My connection with this particular organisation simply amounts to this, that I was made a vice-president of the association of Municipal Corporations, Liverpool branch, as a local M.P. Indeed, until I received the letter referred to I did not even realise that I was a vice-president.

Hon. Members: Withdraw.

Mr. McKinlay: I want to say quite frankly that I have no ill-will against my hon. Friend. I was simply quoting a statement made with regard to his being an officer of the association.

An Hon. Member: That is not a financial interest.

The Deputy-Chairman: May I clarify the position by quoting Erskine May on this point:
Members interested may propose a motion or amendment. Although a member interested is disqualified from voting he is not restrained by any existing rule of the House from proposing a motion or amendment.

Lieut.-Colonel Elliot: Further to that point of Order. Is it not clear that Erskine May had in consideration financial matters, that the interest in question should be a financial interest, that it is a financial interest which an hon. Member is required to disclose and that it is in connection with a financial interest that he would be disqualified from voting?

The Deputy-Chairman: The right hon. and gallant Gentleman's interpretation is correct. I think we can now go on with the Debate.

Mr. Dodds-Parker: Is it in Order for any hon. Member opposite who votes for any of these Amendments or for the Bill to accept a job afterwards under the authority?

The Deputy-Chairman: In answer to that point of Order, I am concerned only with what is happening at present. I cannot deal with nor anticipate what may happen in the future.

Mr. Raikes: Perhaps at this stage I may get on. I will only say in passing that I feel no pain or ill-feeling on the point raised by hon. Members opposite. They had a right to know what my position was and I have explained it. I wish

to say a word about this Amendment especially as my right hon. Friend quite properly referred to the letter which had been written to me by the Association of Municipal Corporations. The date of that letter is 23rd June of this year. I understood from the speech of the Financial Secretary that there had been close touch between the Government and the Association of Municipal Corporations. I do not think I have misrepresented him. If I have he will of course pull me up. But what is the actual position? I do not think he was suggesting that there had been discussions with the association as to the figure of £5 million. That figure, of course, did not exist at the time of the Second Reading, but was introduced suddenly in the Committee stage on 17th April. At that time certain objections were taken to it as being a figure which seemed to be based on nothing at all. I do not think we have been given very much more of an explanation tonight than we were given on 17th April.
What has happened between 17th April and this Debate tonight? As I understand it, neither the Secretary of the association nor any of its officials have met any Minister for the purpose of discussing the question of the £5 million. I believe it is correct that certain officers of that association went to the Ministry and that at the Ministry they were unable for some reason or other to meet the Minister. That is rather unfortunate, in view of the importance of that association in the work which lies before the Government. Indeed, the Financial Secretary has emphasised the importance of their co-operation in certain parts of that work. It seems rather curious that no Minister took the opportunity of seeing them and discussing their case directly with them between the time that this proposal was put forward and tonight. I am not denying that the Minister, no doubt as a result of these gentlemen coming to his Ministry, received a report of their objections to this £5 million. I think, therefore, that my right hon. Friend was perfectly justified in making the point that the question of the £5 million had never been discussed beforehand with the association, and that it had never been discussed between the Minister and the association since the figure was produced. My right hon. Friend would not deny, any more than I propose for a moment to deny, that no doubt the Minister, as a result of the


discussions which his officials had during the visit, had a note of what the objections were. I think it is possible to clear up a point which might conceivably have led to some completely unnecessary heat.
There is considerable doubt whether the £5 million is a suitable figure. It seems to me to be a figure which has not been really worked out completely in any form. That is why we on this side, in the Amendment we have put down, have suggested that there should be no precise figure laid down at this stage, but that after consultation between the Government and the local authorities efforts should be made to pay what appeared on full consideration to be a reasonable sum to the different local authorities taking them as far as we can—we may not be able to do it entirely—one by one. The £5 million may not be a sufficiently ample figure, and if we are tied down to it, and it proves to be wrong, everyone will get less than their due.
It was the view of the Minister that local authorities should not wish to make a profit out of this matter. It is equally important that they should not make any loss. The Financial Secretary said quite frankly that he did not know how long it would take to effect reorganisation, and quite obviously neither he nor the Minister really know how long it will be for that time to come: that is a very strong argument in favour of not being pinned down to £5 million as a maximum figure at the present time.
11.45 p.m.
In regard to rates it seems a little hard that you are treating all the municipalities on exactly the same basis. Take a municipality, which, over a period of time, has not only provided an electricity supply but has also contributed to the rates, perhaps a sum of two million pounds—as with Liverpool. It is to be treated exactly the same as another municipality which has had to take money from the rates in order to help its municipal electricity supply. That is an example of penalising the efficient by means of the inefficient. [HON. MEMBERS: "No".] I am taking an extreme case. There are many municipalities who do use the profits from the electricity supply in order to relieve the rates. I very strongly support the Amendment, for I think we should wait

until there is a fairer allocation. I also believe that there' is a great deal to be said for extending the application of the principle of a tribunal to deal with a matter authoritatively, because the Financial Secretary admitted my last point and made it quite plain that he had been looking for the help of the Association of Municipal Corporations. He has not succeeded up to the present time in getting their support or co-operation either in regard to distribution or to the amount of money involved. It seems to me it might not be an impossible task to have a proper independent tribunal to decide as between local authority and local authority.

Mr. Shinwell: There has been some excitement in general in this Debate, but it could have been avoided if, instead of the right hon. Member for Southport (Mr. R. S. Hudson), the hon. Member for Wavertree (Mr. Raikes) had spoken earlier because I agree with almost everything he said. I understand the right hon. Member for Southport complained about my absense. Having delivered himself of that homily and having indulged in gross discourtesy, he disclaims being discourteous. Having accused me of being guilty of gross incompetence, hon. Members opposite pretend to be polite when they indulge in statements of that character. Presumably when they describe me as grossly incompetent they intend it to be a form of politeness—as a Tory term of endearment. If having been described as grossly incompetent, and having received their usual castigation, I venture to respond even temperately, they are annoyed. The fact is that they like to give, but they do not like to take. The only other thing I want to say about personalities is this. I have been a long time in this House. [An HON. MEMBER: "Too long."] Nevertheless I intend to remain a little longer. After all, I assisted in keeping some of their friends out, which was something of an achievement and was necessary in the interests of good government. Frequently in the course of our Debates hon. Members opposite say what they like about us, sometimes hitting below the belt, and they really must not squeal if some of us can hit straight from the shoulder. What hitting they can indulge in will not worry me. I can take half a dozen of them on before breakfast.
Let us get down to facts. They are not likely to prove palatable to the right hon. Member for Southport. [Hon. Members: "He is not here."] Perhaps that is why he is absent.

Lieut.-Commander Gurney Braithwaite: Listen to the Greek chorus.

Mr. Shinwell: The hon. and gallant Member for Holderness speaks about a Greek chorus. Better to be associated with a Greek chorus than a beauty chorus. The right hon. Member for Southport said there had been no consultation with the Association of Municipal Corporations, and in order to fortify himself in that remarkable declaration, for which there was no justification, he referred to a letter which had ben sent by the association.

Mr. R. S. Hudson: If the right hon. Gentleman is speaking about me he had better quote me correctly. I said I was surprised to hear the claim of the Financial Secretary, and then I proceeded to quote what the letter said.

Mr. Shinwell: The fact is that the right hon. Gentleman does not know what he is going to say when he gets up and does not know what he has said when he sits down. He read a letter which he said had been sent to the hon. Member for Wavertree (Mr. Raikes), who has explained the position with honesty and fairness, on the basis of the facts.

Mr. Raikes: If the right hon. Gentleman will permit me, he is endeavouring to suggest that my explanation and that of my right hon. Friend were at variance. I bore out what my right hon. Friend said —that there had not been that close touch and personal contact which the Financial Secretary claimed.

Mr. Shinwell: The statement of the ten. Member does him credit. He is doing all he can to rally to the assistance of the right hon. Gentleman. I beg to assure him that he is wasting his time. The right hon. Gentleman is just "a painted ship upon a painted ocean." The right hon. Gentleman read from this letter sent by the Association of Municipal Corporations to the hon. Member. It was sent to a large number of other people. I have received one from one of my hon. Friends. No doubt, if I went over to my office I should find several copies there. What they said

was that the sum of £5 million, which it was proposed to divide among the local authorities in respect of the severance of their electricity undertakings, was not arrived at by agreement with the association, and that it was regarded as quite inadequate. That is true, but it does not bear out the allegation that there was no discussion and no consultation.
The fact is that before there was any suggestion of a payment of £5 million in compensation to the local authorities, the Association of Municipal Corporations met the Prime Minister, at their own request. I was present when the deputation was received, and some of my colleagues were there also. The representatives of the association stated their case, and they referred, among other things, to this question of compensation—not the general question of compensation in lieu of losses sustained on rates and the like, but compensation based on severance, and offset in Income Tax, and on other matters. Thereafter, it was decided that we should pay some compensation in respect of severance.
12 m.
We considered what could be done and, I must confess, we found there was great difficulty in arriving at a basis upon which a sum of compensation could be returned. There is no question about that. There was difficulty and there was bound to be difficulty. It is a very complex question but it is true also that during the Committee stage, when I was asked about this formula for the purpose of making payment to the local authorities out of the global figure of £5 million, I was in possession of certain information which resulted from certain discussions that my officials had had not only with the Association of Municipal Corporations but with representatives of the Incorporated Municipal Electrical Association.
As a result, I was in a position of being able to say, based on that information, that we could arrive at a formula which would have regard to the number of units used by municipal electricity undertakings in 1946, and I thought it might be possible to arrive at a satisfactory formula. But, thereafter, the associations concerned made further representations. They had found that there were difficulties associated with this formula and, as a result, we sought to find other formulae and we are still engaged, I say frankly,


in a search for a formula which will prove adequate for the purpose. We propose to issue regulations to provide that these discussions can be continued, until we can find a basis upon which these payments to local authorities can be made. The names of the persons whom my officials met were Mr. Daniels, the Secretary of the Association of Municipal Corporations and Mr. Lithgow, the Financial adviser. These gentlemen came and discussed the matter with my officials. It may be said that the Minister did not, see them. The fact is that I saw, on the' general question including compensation for severance, the Incorporated Municipal Association twice and the representatives of the Association of Municipal Corporations on one occasion. Therefore, it cannot be alleged that we ignored these representative bodies. On the contrary, we sought every means to elicit from them the information upon which we could come to a satisfactory conclusion, and, in view of what we did, the suggestion that we are guilty of gross incompetence—all I can say is that this is a characteristic of the right hon. Gentleman.
What are the facts about this matter? The Financial Secretary—I think it is within the recollection of hon. Members who were present on both sides of the House—made a speech which was, in lucidity of expression, one of the best that has been heard. There can be no doubt about his meaning and he dealt with that matter point by point until no one could say there was ambiguity about the position—and I have only to dot the i's and cross the t's. Take the real issue of this question—the compensation to local authorities. If local authorities— and the number was mentioned by my right hon. Friend—were making a contribution to rates out of revenue of electricity undertakings, to that extent they were depriving the electricity consumer of their legitimate rights. It amounted to this; it was a queston of rates versus rights, and therefore, local authorities who were making such a contribution to rate relief were not justified in doing so in view of the claims of the electricity con sumers. In any event, it is certain that, if we were to pay compensation in lieu of rates to any local authorities there would be terrific resentment on the part of other local authorities who had played the game all the way through.
The question is whether the amount of compensation suggested is adequate. I would tell the Committee what the position is as regards the claims of the representatives of the municipal organisation. They have said to us, and I ask members opposite to note it, "£5 million is not enough. Give us £10 million. Give us £10 million and we will call it a deal No questions asked. We will find some method of distributing the amount. There may be difficulties in respect of individual determination of payments, whether this or that authority receives this amount or that, but just leave it to us and it can be arranged." You simply cannot go on indulging in pranks of that kind and, indeed, my hon. Friend the Member for North Wembley (Mr. Hobson) said we have been generous in giving £5 million
Let it not be forgotten that, in asking the Central Authority to provide compensation, we are asking them to increase the burdens on electricity consumers. We must be very careful not to impose burdens on the new Authority. I agree at once that it is very difficult to effect an equitable distribution of £5 million and I can understand why the Opposition has put forward this Amendment. What they are saying in effect is this: would it not be better to have some form of tribunal so that the local authorities, who have claims to present, can go and say, "Here is our claim; we want you to consider it," and, once a claim has been dealt with, receive the amount to which they think they are entitled. There are 370 local authorities and they would all present claims. Some would be very involved and some would be very extravagant and, no doubt, the 370 local authorities would all employ members of the legal profession to state their case, and that would involve the local authorities in expenditure which would have to come out of rates.
It is our view—maybe it is a simple view, but nevertheless it is our view—that it is far better to have a global figure and, in consultation with the local authorities, find some formula which will be more or less satisfactory and see if we cannot reach some happy conclusion in that way. It does not seem to me that we need go beyond that. My hon. Friend the Member for Bridgeton (Mr. Carmichael) asked whether there had been any consultation with local authorities over the


Border. The Incorporated Municipal Electrical Association has branches in Scotland. The president of the association. Mr. Pickles, whose presidential address, delivered yesterday, which I have in my possession, indicates they are thorough-going supporters of the nationalisation of electricity supply, is the manager of the Dumfries County Council Electricity undertaking, which is one of the best undertakings in the country. Therefore I would ask my hon. Friends behind me—I know there are differences of opinion—to believe me when I say that we have made every effort to satisfy the local authorities, that on the whole this is a reasonable conclusion at which we have arrived, and that, while some local authorities may be dissatisfied, generally speaking we are endeavouring to meet their claims.
As for the Amendment, I ask the Committee to reject it on the grounds that it is obstructive, that it would prolong the agony, and is, at any rate, not an indication that Members opposite are anxious to support the local authorities. It 1s rank hypocrisy for them to say that they support the local authorities when some of those which they claim to support happen to be Socialist authorities. What is more, I say that it is a clear indication, as has been clear to us all along the line, that Members opposite will do anything open to them in order to defeat this proposition of nationalisation.

Mr. Lipson: I am afraid that the local authorities will get very little satisfaction when they read the speech, of the Minister. I think many of them will be hurt, and I must say, justifiably hurt, at the way in which he has referred to them. To suggest that a responsible body like the Association of Municipal Corporations would go to him and want to do a deal of about ten million pounds, with no questions asked, 01 something of that kind, is, if I may say so, unworthy of a Minister of the Crown On reflection, I hope that fee Minister will realise that this is not the correct method of approach to local authorities, or the way to speak of a body of men who are rendering very great service to the people of this country. The Financial Secretary himself said of the proposals in the new Clause, that they represent rough justice. That is not a very extravagant claim to make: and, personally, I would emphasise

the rough side and say that the justice side, as I see it, is very little in evidence.
The local authorities say that they are getting a very raw deal under this Bill They are being treated worse than the companies are being treated, because the companies at least are being bought out at the market value of their securities Therefore, the local authorities say that the ratepayers whom they represent will have their burdens increased as a result of the passing of this Measure, and that it is only right that they should be compensated for the loss. This loss falls under three heads: the loss under severance, which the new Clause recognises; the loss of the set-off against Income Tax; and the loss with regard to the assistance which has been given to the rates from the electricity undertakings. I submit that there is nothing wrong in a local authority receiving aid for the rates from the profits of an electricity undertaking.
12.15 a.m.
It is not fair to say that this has been done at the expense of the consumers unless facts can be given to prove it; unless you can prove that the consumers in those areas where the rates have benefited have been overcharged for their electricity. In point of fact, those undertakings which have been able to subsidise the rates are those whose undertakings have been most efficiently run. That is the reason why they have been able to do it. In my constituency, in spite of the assistance which the rate gets from the three sources I have indicated, the rates are 20s. in the pound and they will be much more than that as a result of this Bill. Where there is a difference of opinion between representatives of a local authority and the Government I cannot see how the Minister can, in justice, deny that this whole thing should be subject to arbitration. The local authorities are equally convinced that the sum is inadequate just as the right hon. Gentleman thinks it is, adequate.

Mr. Shinwell: The local authorities have never once asked for this to be put to arbitration.

Mr. Lipson: The Amendment suggests that arbitration should be used so far as the distribution of the amount is concerned. But there is a difference of opinion between the Association of


Municipal Corporations and the Government as to the amount to be paid. I submit that the only way in which it could be settled satisfactorily would be to use the method of arbitration. Any way, whether the Association have asked for it or not, the Minister is not sure that the live million pounds is a reasonable amount. He is not so sure that he is ready to submit it to arbitration. If he is confident, he should be prepared to do so. Of course, it might be that the arbitrator would say "This is too much." That has been suggested by an hon. Member, but it has to be remembered that if one goes to arbitration one has to accept the result. Arbitration is the proper way of dealing with this, and if the maximum is five millions I am sure there will be a very grave feeling of dissatisfaction among the local authorities of this country.
If there had been no local authority undertakings it would have cost the Government much more than the sum which the local authorities are getting. That is a factor in this argument. I would appeal to the Minister, even at this stage, to give further consideration to the representations of the local authorities and try to arrive at an amount, not to be fixed tonight, but one which can be given to this House later on for further discussion. I do put it to the Minister that this is the only just way of dealing with this matter

Mr. David Eccles: The substance of the Minister's argument appeared, to be that a proper assessment would take so much time and trouble that it was better to have a shot in the dark and that that is good enough. I do not think he will get anywhere near a right decision. Is there any difference between the consumers and the ratepayers? Are they not mostly the same people?
If it is a case of rates versus rights the argument does not hold water. It may be a good thing to say on the platform, but let us examine what the Financial Secretary has said. He put it forward that 74 authorities helped the rates to the tune of £309,000. But that is not the whole story. That is the proportion of the profits which they chose to transfer to the relief of the rates. Of course, they made very much more profit than that and, no doubt, with the far greater sums which they retained in their undertakings,

they paid off some of that debt and increased the value of the assets which belonged to the municipalities concerned. It must be true that different municipalities pursued different financial policies in regard to their reserve allocations and the amount of help they gave to the rates and, therefore, it is not an easy matter to decide what is really the loss to any given municipality under some general formula.
Now as I understood the Minister, he said it was wrong for them to have made profits out of the sale of electricity. He said that was depriving the consumers of their rights. He said that the price of electricity should have been so adjusted downwards that the accounts balanced. That was the substance of his argument. What will now happen under the compensation as proposed? In the cases where rates have been aided by profits from the electricity undertaking, those rates will have to go up. When they go up the consumers of electricity who were also ratepayers—and I claim that a great many of them were—will be in a worse position unless the price of electricity is reduced after nationalisation takes place. Have we any assurance that in these cases the price of electricity is going to be reduced? If we have no assurance on that point, then it is quite obvious that these particular people will suffer a loss as a result of the undertaking being nationalised. Then we have this extraordinary contradiction; that one Minister of the Crown says it is wrong to make a profit out of selling electricity, in which case no compensation ought to be paid at any time, and the other Minister of the Crown says, "We are going to compensate these particular people for the loss of rates when we readjust the block grants."

Mr. Glenvil Hall: Obviously the hon. Gentleman has got my argument wrong. If I may say so, as far as I know, local authorities have never pressed for compensation because of the effect on rates. They have almost universally realised the position. Although it may be, as he says, that rates may go up because of this loss—they never have put in a serious claim that they should be compensated because one particular authority aided the rates with the profits made from an electricity undertaking.

Mr. R. S. Hudson: What I said was that the proposition was put up at a meeting of the Municipal Corporations. That proposition was defeated on purely political grounds by the majority who were Socialists.

Mr. Glenvil Hall: If I may put it this way, what I was trying to do was to show that losses do arise through the fact that some local authorities would now no longer be able to aid the rates. But I wanted to do justice to the local authorities.

Mr. Eccles: I think the hon. Member for Houghton-le-Spring (Mr. Blyton) pointed out that certain local authorities suffered very much. I consider it to be the duty of hon. Members to look into this matter and, if we think that local authorities or anybody else have a claim which they might not have put forward, it is up to us to put it forward. I cannot see how the Government can get out of the position that in certain circumstances some consumer-ratepayers will be worse off under nationalisation, and I cannot see why that should not be a matter for compensation.
The Government's case is that they cannot find a formula. They say, "Let us have this five million pounds sum and see how it goes." I agree with the right hon. Member for Southport that it would be better to do justice even if it takes a little more time. Can the Government assure us that the local authorities would reject our proposal? I do not think they can say that. I am sure if they put it to the representatives of the local authorities that the figures of loss will be properly worked out, they would prefer it. Perhaps after all it would turn out that the sum would be less. It would depend upon the terms of reference to the Tribunal. I am not prepared to say that five or ten million pounds is right. We will not get justice under the Clause as it stands, but under the Amendment, if accepted, we shall get justice.

Mr. Boyd-Carpenter: The question it seems to me is not whether agreement has been or could have been come to between the local authorities and the Government; surely the question, and the only material question, is whether proper compensation is being paid and being paid in the right way. As I understand it, all hon. Members with the possible exception of

the hon. Member for West Fife (Mr. Gallacher) concede that compensation should be paid when property is taken over. That necessarily involves an assessment of compensation by reference to some outside factor, and I think that our proposal does meet that. I think I am right in saying that this is the first occasion on which property has been taken over under a nationalisation Bill without the compensation to be paid being assessed by reference to some outside authority or to some outside—

Mr. Hobson: The principle of which the hon. Gentleman complains has been applied in other cases; for example, the East and West Ham tramways were taken over by hon. Members opposite on precisely the same basis as is contemplated for the electricity undertakings in this Bill.

Mr. Boyd-Carpenter: I do not think for one moment that the hon. Member is right in saying that that principle was followed in the case of the East and West Ham trams of simply voting a lump sum. The question is: is this a proper compensation proposal to pass the House of Commons or not? My first and principal objection to it is that there is no specific proposal included in the Bill. I think the Committee is entitled to be told why there is no full and detailed proposition put up in the Bill. Let me remind the Committee of what the right hon. Gentleman the Minister of Fuel and Power himself said upstairs in Committee on 17th of April when he announced the proposal. I quote from col. 646 of the OFFICIAL REPORT. The Minister then stated:
What I am saying is that if we should decide compensation we have to devise a formula and get a basis on which it is to be paid and that whatever is decided can easily be expressed in the Bill. There is no difficulty about that."—[OFFICIAL REPORT, Standing Committee E, 17th April, 1947, c. 646.]
12.30 a.m.
That was over two months ago and yet no such formulae, no such proposals, have yet been put forward into this Bill. I think we are entitled to be told why. Was the reason gross incompetence? Or were there some other reasons why it has been found inconvenient to include it. The point surely is—and it is the only material point—whether this is a method of compensation which can be allowed to


go from this committee. We are given a figure which the Financial Secretary himself said might be over generous. I should be entirely opposed to giving compensation which was over generous. We are not told in any way whatever how it is to be allocated and sub-allocated among the 370 local authorities concerned Surely we are entitled to be told that. What is proposed is apparently simply this—

Mr. Gallacher: On a point of Order. Is it in Order that some points which have been put by a Front bench Member and which were answered by the Minister should be repeated? The Minister explained the formula which they had agreed upon and which had then, because of this or that, to be discarded. He explained it arising out of the argument of the right hon. Gentleman. This is complete repetition.

Mr. Boyd-Carpenter: If the hon. Member for West Fife has had the good fortune to be let into the secret of the Government's formula—

Mr. House: On a point of Order. Can we have this point of Order met, please.

The Chairman: Tedious repetition is not permissible. But I do not think we have quite reached that point yet.

Mr. Gallacher: But the Minister answered the point.

The Chairman: That may be, and I hope hon. Members will forebear to use repetitive arguments.

Mr. Boyd-Carpenter: If the hon. Member for West Fife has been let into the secret of the Government's formula, and also let into the secret of why there has not been included a provision which the Minister said more than two months ago could easily be included, he is in a somewhat monopolistic position. If that explanation is available, it should have been divulged, not in secret to the hon. Member for West Fife, but to this Committee. If there is to be any suggestion of repetition may I say this: perfectly reasonable questions were put to the Minister by several hon. and right hon. Gentlemen who spoke before me. The right hon.

Gentleman did not answer any of them. I submit that Members of the Committee are entitled to demand of the Government that these highly pertinent and highly material questions shall be answered. Some of us are not prepared simply to vote £5 million to be handed over to the Minister to be distributed as the Minister thinks fit, scattered like chicken feed to a flock of chickens by the Minister. For many reasons not only do we think that inexpedient, but we are not prepared to entrust such a vital function to a Minister who might well think that such compensation should only be paid to—if I may adopt his own phraseology—intelligent municipalities of a non-Tory character.

Mr. Wilkins: I only want to take up one point which has been put before the Committee from the other side, and which I think is a complete fallacy. I have been associated with probably one of the largest if not the largest municipal electricity undertakings in the country. I think my hon. Friend the Member for Stockport (Sir A. Gridley) was also a member on one occasion. I believe it is true to say that the Act governing the electricity industry lays down there must be 5 per cent. of the capital value of the undertaking in the reserve fund before any authority may distribute money to the rates. Therefore, it is clear that very few authorities in this country have built up sufficient reserves to enable them to make contributions towards the relief of the rates.
I hope the Minister will not listen to the argument that compensation for these authorities should help their rates funds, because the more progressive authorities have taken the view that it was their business to help consumers who had helped to build up the undertaking. We have done so by making available to the consumers of Bristol electrical labour-saving appliances at very low charges for hire. Consequently, if the Minister does listen to the plea now being made that he should compensate for rate-aids, he will fall foul of those authorities who have distributed their surpluses for the benefit of the consumers who built up the undertakings by their support. I hope the Minister will stand firm on this point. I am as anxious as any Member to see that local authorities are justly treated in this matter. I think they have a claim on the basis of their Income-tax set-offs and for stock


management expenses towards which the Government may well pay, but on rate-aids they have no claim at all.

Lieut.-Colonel Elliot: The Debate, with its two contributions from the Minister and the arguments brought forward by the right hon. Gentleman on the justice of the claim, seems to recall the eminent judge, whose views will no doubt be familiar to-the Solicitor-General—the judge who reflected on one occasion, "many murderers have escaped, but, on the other hand, a number of innocent men have been hanged, so on balance justice has been done." That is the sort of average which the Government are attempting to strike, for the Minister seems to fail to understand with whom his quarrel is. His quarrel is with the local authorities.

Mr. Gallacher: There is not a quarrel with anybody.

Lieut.-Colonel Elliot: The Minister's quarrel is with the Association of Municipal Corporations and with other bodies of local authorities. The points in regard to the Association of Municipal Corporations have been brought out very clearly and it is necessary to point out again what was said:
The Minister's statement was made with out any prior consultation with my Association. We were given no opportunity of expressing our views of the suitability of the amounts proposed to be included in the Bill. An appropriate Government Amendment now stands on the Order Paper in the name of Mr. Shinwell. In the interval my Association have had no opportunity of expressing their views as to the adequacy of this sum to the Minister.
That is not a statement of any Member on this side of the House; that is a statement of the Association of Municipal Corporations. It is a statement which the Minister has to deal with—but this is not the only statement the Minister has to deal with. The Association of Urban District Councils has also expressed its views. I do not happen to be an officer of this Association and I have no interest of any kind or description in it. They wrote:
You may like to know the views of the urban district councils, 112 in number, who own electricity undertakings, and I am sending herewith copies of two letters I wrote the Prime Minister.
They enclose letters which say that on 14th March

We desire respectfully to protest against these terms inasmuch as, apart from the loss which the urban district councils will incur through being deprived of their right under the Electricity Supply Act, 1926, to transfer profits in relief of current rates … we will also suffer serious loss by the severance of the electricity undertakings from the functions which they carry on.
In letters on 14th March and 6th June, they protest again, saying that
the Association protest at what they regard as the inadequacy of the global sum for compensation of £5 million, which on 17th April the Minister of Fuel and Power announced as the compensation proposed to be made to meet substantially the claims of the local authorities. They would earnestly ask that the amount of the global sum should not be determined without consultation with the local authorities.
They say on the 23rd June:
I am informed by the Secretary of the Association of Municipal Corporations that the Ministry of Fuel and Power have not acceded to the suggestions which that Association and the Urban Districts Councils' Association both made that the question of the global sum should be discussed with the Associations.

Mr. Glenvil Hall: A tribunal or arbitration was never suggested.

Lieut.-Colonel Elliot: The Minister can always be trusted when the chance comes of putting his foot into it, to put it in up to the thigh. He now repeats the statement he has made once or twice—I did not intend to be harsh—that they have never suggested that there should be a tribunal and that it was never suggested there should be arbitration. How then does he explain the Amendment drafted by them to Clause 14, page 20, line 48:
Provided that if any local authorities are dissatisfied with the determination of the Minister under this Section, they shall be entitled to have the question determined by an arbitration tribunal"?

Mr. Shinwell: That relates to compensation on severance.

Lieut.-Colonel Elliot: The fact of the matter is that the local authorities, as is well known, have been in consultation with each other and have repeatedly stated their dissatisfaction with the size of the sum. They desire to have further discussion with the Minister on the size of the sum. Quite clearly, the distribution of the sum is also a matter on which they are dissatisfied. Here the Minister 'himself, I think, cannot be held guiltless, because he held out the hope in Com-


mittee that he would be able to put something down on the Paper which would deal with the question of distribution. It is well known that on Friday morning the Clause the Minister had been brooding over did appear on the Paper. It stated that the Minister would distribute the sum in accordance with any ideas the Minister might have. He could have put that on the Paper without two months' delay and avoided the complicated and cumbersome procedure of Report stage and the recommittal of a new Clause at the end. It derives directly from the inability of the Minister to arrive at a clear and simple method of distribution which he held out hopes that he would be able to do. If the Minister has taken so long and has not yet found a suitable formula, what guarantee is there that he will find a suitable formula at all? All the arguments tonight are against that. There are still 370 local authorities, and it will take a long time, he says, under a tribunal to inquire into their claims.

The Minister's proposals will not be a saving of time. All they mean is that compensation, admittedly inadequate, is to be distributed along lines the Minister is unable to disclose. I do not think that is a reputable record. I do not think it is an adequate way to deal with compensation. The proposal we make for a tribunal is one of obvious and simple justice, which could be easily written into the Bill now and would work satisfactorily in the future. More than that, it would tend to resolve the quarrel between the municipal corporations, the urban districts, the great local authorities of this country, and the Government, which is the real difficulty with which we are faced and with which the Minister and the Financial Secretary have struggled so long tonight, and wholly in vain.

Question put, "That the words proposed to be left out stand part of the proposed Clause."

The Committee divided: Ayes, 182; Noes, 69.

Division No. 287
AYES
12.46 a.m


Adams, Richard (Balham)
Edelman, M.
Longden, F


Adams, W. T. (Hammersmith, South)
Evans, John (Ogmore)
Mack, J. D.


Allen, A. C. (Bosworth)
Evans, S. N. (Wednesbury)
Mackay, R. W. G (Hull, N.W)


Anderson, A. (Motherwell)
Fairhurst, F.
McKinlay, A. S.


Attewell, H C
Field, Captain W J.
McLeavy, F


Baird, J.
Fletcher, E G M (Islington, E.)
Mallalieu, J P W.


Bechervaise, A E
For man, J C
Manning. Mrs L (Epping)


Bing, G H C
Freeman, Maj J. (Watford)
Mathers, G


Blackburn. A. R
Gaitskell, H. T. N.
Mellish, R J


Blenkinsop, A.
Gallacher, W
Mikardo, Ian


Blyton, W R.
Ganley, Mrs C S
MillingK, Wing-Comdr E. R


Bowden, Flg.-Offr. H W
Gibbins, J.
Mitchison, G. R


Bowles, F G. (Nuneaton)
Gibson, C W.
Monslow, W


Braddock, Mrs. E. M (L'pl, Exch'ge)
Gilzean, A.
Morris, P (Swansea, W.)


Bramall, E. A
Glanville, J. E. (Consett)
Murray, J D


Brook, D. (Halifax)
Greenwood, A. W J (Heywood)
Nally, W


Brown, T J. (Ince)
Grey, C. F
Neal, H (Claycross)


Buchanan, G
Griffiths, D. (Rother Valley)
Nichol, Mrs. M. E. (Bradford, N.)


Burke, W. A
Griffiths, W D. (Moss Side)
Nicholls, H. R. (Stratford)


Butler, H. W (Hackney, S.)
Haire. John E (Wycombe)
Noel-Baker. Capt F E. (Brentford)


Carmichael, James
Hale, Leslie
Noel-Baker, Rt. Hon. P. J. (Derby)


Castle, Mrs B. A
Hall, W. G
Oliver, G. H


Champion, A J
Hamilton, Lieut.-Col R
Orbach, M.


Chelwynd, G R
Hannan, W. (Maryhill)
Paling, Will T (Dewsbury)


Cocks, F. S.
Herbison, Miss M.
Palmer, A. M. F.


Collindridge, F
Hobson, C. R.
Pargiter, G A


Collins, V J
Holman, P
Paton, J (Norwich)


Caiman, Miss G. M
House, G
Pearson, A


Comyns, Dr. L.
Hoy, J.
Peart, Thomas F.


Corbet, Mrs. F. K. (Camb'well, N.W.)
Hubbard, T
Plans-Mills, J F F


Corlett. Dr. J
Hutchinson, H, L. (Rusholme)
Popplewell, E


Crawley, A.
Hynd, H (Hackney, C.)
Porter, G. (Leeds)


Crossman, R H
Janner, B.
Price, M. Philips


Daggar, G
Jeger, G (Winchester)
Pritt, D N


Dairies, P
Jeger, Dr S. W. (St. Pancras, S.E.)
Proctor, W. T


Davies, Edward (Burslem)
Jones, D. T. (Hartlepools)
Pryde, D J


Davies, Harold (Leek)
Jones, Elwyn (Plaistow)
Pursey Cmdr H


Davies. Hayden (St. Pancras, S W)
Jones, P. Asterley (Hitchin)
Randall, H E.


Deer, G.
Keenan, W
Ranger, J


de Freitas, Geoffrey
Kendall, W. D
Reid T (Swindon)


Delargy, H. J.
King, E. M.
Robens, A.


Diamond, J
Lang, G
Roberts, Goronwy (Caernarvonshire)


Driberg, T. E. N.
Leonard, W
Pobertson, J. J (Berwick)


Dugdale, J. (W. Bromwich)
Lewis, A. W. J. (Upton)
Rogers, G


Dumpleton, C. W
Logan, D. G
Ross, William (Kilmarnock)




Royle, C.
Stubbs, A.E.
West, D. G.


Scollan, T.
Sylvester, G. O.
Whiteley, Rt. Hon. W.


Segal, Dr. S.
Symonds, A. L.
Wigg, Col. G. E.


Shackleton, E. A. [...]
Taylor, H. B. (Mansfield)
Wilcock, Group-Capt. C. A. B.


Sharp, Granville
Taylor, R. J. (Morpeth)
Wilkins, W. A.


Shawcross, C. N. (Widnes)
Taylor Dr. S. (Barnet)
Willey, F. T. (Sunderland)


Shinwell, Rt. Hon. E.
Thomas, I. O. (Wrekin)
Williams, J. (Kelvingrove)


Skeffington, A. M.
Thomas, George (Cardiff)
Williams, W. R. (Heston)


Skeffington-Lodge, T. C.
Thorneycroft, Harry (Clayton)
Willis, E.


Skinnard, F. W.
Tiffany, S.
Wills, Mrs. E. A.


Smith, C. (Colchester)
Tolley, L.
Woodburn, A.


Snow, Capt. J. W.
Ungoed-Thomas, L.
Yates, V. F.


Sorensen, R. W.
Walkden, E.
Younger, Hon. Kenneth


Soskice, Maj. Sir F.
Wallace, H. W. (Walthamstow, E.)



Stewart, Michael (Fulham E.)
Watkins, T. E.
TELLERS FOR THE AYES


Stokes R. R.
Watson, W. M.
Mr. Joseph Henderson and


Stross, Dr. B.
Weitzman, D.
Mr. Simmons.




NOES


Astor, Hon. M.
Fraser, H. C P.'(Stone)'
Molson, A. H. E.


Baldwin, A E.
Gage, C.
Neven-Spence, Sir B


Birch, Nigel
Galbraith, Cmdr. T D
Nield, B. (Chester)


Boles, Lt.-Col. D. C (Wells)
Gridley, Sir A.
Noble, Comdr A H. P.


Bossom, A. C.
Haughion, S. G.
Osborne, C.


Bower, N
Henderson, John (Cathcart)
Peto, Brig. C. H. M.


Boyd-Carpenter, J. A.
Hinchingbrooke, Viscount
Prescott, Stanley


Bracken, Rt. Hon. Brendan
Hollis, M. C
Prior-Palmer, Brig. O


Bromley-Davenport, Lt.-Col. W
Hudson, Rt. Hon. R. S. (Southport)
Raikes, H. V.


Channon, H.
Hurd, A
Roberts, Maj P. G (Ecclesall)


Clarke, Col R. S.
Hutchison, Col. J. R. (Glasgow, C.)
Robinson, Wing-Comdr. Roland


Clifton-Brown, Lt.-Col. G
Jarvis, Sir J.
Ropner, Col L.


Conant, Maj. R. J. E
Lambert, Hon G
Sanderson, Sir F


Crosthwaite-Eyre, Col O. E
Lancaster, Col. C G
Scott, Lord W.


Cuthbert, W. N.
Langford-Holt, J.
Spearman, A C M.


Digby, S. W.
Legge-Bourke, Maj. E. A. H.
Spence, H. R.


Dodds-Parker, A. D.
Lipson, D. L.
Stanley, Rt Hon. O


Dower, E. [...] G. (Caithness)
Lucas-Tooth Sir H.
Sutcliffe, H.


Drayson, G. B.
Mackeson, Brig. H. R.
Vane, W M. F.


Drewe, C
Macpherson, N. (Dumfries)
Williams, Gerald (Tonbridge)


Eccles, D. M.
Maitland, Comdr. J W.
York, C


Eden, Rt. Hon. A.
Marshall, D. (Bodmin)



Elliot, Rt. Hon. Walter,
Marshall, S. H. (Sutton)
TELLERS FOR THE NOES


Foster, J. G. (Northwich)
Mellor, Sir J
Mr. Studholme and




Lieut.-Colonel Thorp


Question put, and agreed to.

Clause added to the Bill.

NEW CLAUSE.—(Bodies to whom Part 11 of Act applies.)

(1) This Part of this Act applies to—

(a) the bodies specified in the Schedule (Authorised undertakers to whom Part II of Act applies) to this Act (hereafter in this Act referred to as "authorised undertakers") being the bodies who fall within the class described in the next following subsection;
(b) every company (hereafter in this Act referred to as a "power station company") who are not authorised undertakers but whose business wholly or mainly consists in the construction, owning or operating of a generating station or stations for the supply of electricity to authorised undertakers; and
(c) every company (hereafter in this Act referred to as an "electricity holding company") who—

(i) are not authorised undertakers, or a power station company,
(ii) had at the date of the last audited balance sheet of the electricity holding company before the first day of January, nineteen hundred and forty-six, one or more subsidiary companies, being authorized undertakers or power station companies, and
(iii) at the said date held securities of, or rights in respect of moneys owed by,

the said subsidiary companies, the value of which, as shown in that balance sheet, amounted to not less than three-quarters of the total amount of all the assets of the holding company as so shown.

(2) The class of bodies referred to in paragraph (a) of the last foregoing Subsection are—

(i) bodies who supply electricity under the authority of any enactment in any area of supply in Great Britain; and
(ii) bodies who supply electricity, under the authority of an enactment, to the bodies mentioned in paragraph (i) hereof or to the Central Electricity Board;

Provided that the said class does not include—

(a) any body, other than a local authority, whose business as suppliers of electricity consists wholly or mainly in the supply of electricity for consumption by themselves or by a company of whom they are a subsidiary company;
(b) any local authority who supply electricity for the purposes of a transport undertaking carried on by them and do not supply electricity for other purposes to any substantial extent; or
(c) any body, other than a local authority who carry on a transport undertaking and who do not supply electricity under any provisional or special order made under the Electricity (Supply) Acts, 1882 to 1936.

(3) Where a special order made under section twenty-six of the Electricity (Supply) Act, 1919, comes into force between the passing of this Act and the vesting date and provides for the transfer of the undertaking or any part of the undertaking of any authorized undertakers to another body, the order may—

(a) if the body from whom the undertaking or part thereof is transferred no longer falls within the class described in Subsection (2) of this Section, provide that this Part of this Act shall not apply to that body;
(b) if, by reason of the transfer, the body to whom the undertaking or part thereof is transferred falls within the said class, provide that this Part of this Act shall apply to that body;
and this Act shall have effect in accordance with any such direction.

(4) Any such special order may, for the purpose of giving effect to a transfer of the undertaking or part thereof, revoke or amend any enactment relating to the powers of the body from whom the undertaking or part thereof Is transferred.

(5) For the purposes of paragraph (c) of Sub section (1) of this Section, where the value of any such securities or rights as are therein mentioned is not separately shown in the balance sheet therein mentioned, by reason that they are grouped with other assets of the company and the balance sheet shows the value of the group as a whole, the value placed on the said securities or rights in the books of the company and used in arriving at the value of the group of assets as so shown shall have effect as if it had been shown separately in the balance sheet."—[Mr. Gaitskell.]

Brought up, and read the First time.

Mr. Gaitskell: I beg to move, "That the Clause be read a Second time."
In the Bill as originally drafted the bodies whose assets were to be transferred were authorised undertakers, power station companies and certain holding companies, and authorised undertakers were defined as the Central Electricity Board, any joint electricity authority and any other body authorised by any enactment to supply electricity in Great Britain. This last definition was found to be too wide. It includes certain local authorities and other bodies which supply electricity for transport and tramways only, and the attempts we made to try and narrow the definition were not entirely successful. We finally decided that the best way of dealing with the problem was to put a list of authorised undertakings into a Schedule and describe in the new Clause, in general terms, the classes of bodies to be taken over in the Schedule. These changes were foreshadowed by my right hon Friend at an

early stage in the proceedings in Committee and subsequently I myself gave the scheme in outline in the discussions on Clause 59. The new Clause takes the place of Subsections (2) and (3) of Clause 13, and it proceeds to list the three groups: first, all those in the Schedule; secondly, power station companies; and thirdly, holding companies.
Apart from the differences I have mentioned, the only other change is in the definition of holding companies. This has been altered again in accordance with undertakings we gave so as to allow out of vesting certain classes of holding companies which otherwise would have been in. As the hon. Member for Stockport (Sir A. Gridley) will recall, he asked during the Second Reading Debate whether we were to take over holding companies with no controlling interest in any subsidiary companies? I indicated that we should not do so. There is one such company which will be excludes under the new arrangements as I shall describe in a moment. Now we are pressed to go further than that and we have agreed to do so and adopted the suggestion made by the Opposition that we should take over holding companies which have 75 per cent. of their assets in the form of holdings of subsidiary companies in the electricity industry. And that of course, does narrow the field slightly. I will explain the change by example. If a company had assets of £I million and £500,000 in subsidiary companies, say, £300,000 in other electricity undertakings which it did not control and the remaining £200,000 in cash and outside investments, such a company will now be excluded whereas previously it would be included.
I do not need to say very much more about the new Clause. Subsection (2) indicates the classes of bodies included in the Schedule and specifically excluded. Subsections (3) and (4) provide for alterations which may be made by special orders before the vesting date. Finally, we had the assistance of the Opposition who put down two Amendments of a technical kind at an earlier stage which we certainly would have wished to accept in principle. We discussed the matter with the Opposition as to whether a slightly different Amendmem would meet these points and we are grateful to


the Opposition for drawing attention to these weaknesses in our original draft.

Mr. R. S. Hudson: I beg to move, as an Amendment to the proposed Clause, in line 20, at the end, to insert:
Provided that it any electricity holding company shall before the vesting date serve on the Minister a notice in writing requiring that in respect of the securities or rights' mentioned in paragraph (c) of this subsection the company desires to be treated in like manner as other holders of the like securities or rights, then for the purposes of this Act such company shall be treated accordingly and shall be deemed not to be an electricity holding company.
Perhaps it would be for the convenience of the Committee if I also deal with the following Amendment on the Paper to insert:
Provided that any of the bodies specified in Part II (Composite companies) of the said Schedule may, at any time before the vesting date, serve on the Minister notice requiring that this Act shall not apply to such body and thereupon this Act shall not apply to such body.
These Amendments are intended to provide that different persons may opt to be out of the Clause. The result of our first Amendment would be to enable holding companies to opt right out of the Bill altogether. I do not want to go into it at great length except to say that if any such holding company did opt out, it would not prevent the new Central Electricity Authority from having all the electricity assets that the holding company possess. The electricity assets would automatically, of course, vest in the Board, and it would really enable the holding company for other purposes, either at home or with important assets from an invisible export point of view abroad, to continue in business. We do not think that on the whole this could do any harm to the general routine set up in the Bill.
1.o a.m.
The second Amendment refers to a comparatively small number of special cases of composite bodies, undertakings which are probably only 12 in number. Under the provisions of the new Clauses, arrangements are contemplated whereby these composite companies can sever their electricity undertakings, which have to be handed over to the Board, from the rest

of their activities, in particular, and most important, gas. We understand, from speeches made by Members of the Government, that, sooner or later, they propose to bring in a Bill to nationalise the gas industry. On that assumption, as the electricity portions of these companies are not of any great importance or moment, it would seem better that, instead of going through all the difficulties which will be involved in severing the electricity and gas parts of the undertakings for a comparatively short time before gas is nationalised, they should carry on as they are and that one bite should then be made at the cherry and the whole lot taken over later on, when the gas industry is nationalised. That represents, very briefly, the substance of our two Amendments, and I hope that the Government, even if they cannot accept the exact wording of the Amendments as we have them on the Order Paper, will consider accepting the principle of them and possibly making the necessary alterations during later stages of the Bill.

Sir A. Gridley: I was hoping that someone would rise from the Front Bench opposite to give us an indication whether the Government are going to accept these Amendments, or not. If they are not going to accept them, I am afraid I must put my case in support of them. May I disclose a particular interest which I have in this matter, because I happen to be a director of a small combined electric lighting and gas undertaking? It may be one of a dozen undertakings which own gas or water undertakings or both. It would be a most absurd arrangement if we had to part with the electricity undertakings and were left for a comparatively short time to carry on with the gas. In fact I do not know how it would be possible to do so, because the majority of the management and staff are engaged in looking after the electricity supply undertaking, which is by far the larger of the two; there would be no one, if the electricity undertaking were taken over, with its staff, to run the gas undertaking properly. There are other cases where these composite companies have ordinary shares, preference shares and debenture shares, and if part of the securities is taken over, great complication would arise with regard to the rights of the debenture holders and so on.
These are reasons additional to those which were put by my right hon. Friend, and there is the third point which I would raise. We have had a very long discussion about compensating local authorities. There would be a similar question arising about these composite organisations and there is no suggestion there should be compensation for such companies as these. I should have thought that from the commonsense point of view the Government's nationalisation would be in no way affected by these 12 undertakings being left as they are as a matter of convenience. It will not make the initiation of the nationalisation of the industry much different. Leave these for 12 months or so until the gas nationalisation Bill is put on the Statute Book. Of course, if the Government say they have not any intention of nationalising gas, the position is different but we have heard no alteration to the statements made that that industry is to be nationalised. The Government will have gas, electricity, coal, and oil in one great monopoly undertaking, and I do feel the Minister should say if there is any real reason why the undertakings to which I refer should be disturbed. They will fall into the Government's lap in due course and if the Government leave them alone, there will be no unnecessary dislocation.

Mr. Gaitskell: I am sorry, but we cannot agree to this Amendment. I would like to meet the Opposition on this but there are pretty strong grounds why we cannot go farther than we have already gone. I think the Opposition will agree that we have gone a long way to meet them. These holding companies— now reduced to 12—are true holding companies managing a series of electricity undertakings, as an essential and integral part of the electricity supply industry. As hon. Members have said, these companies have played a worthy part in the past in developing electrical supply. We shall be taking over few non-electrical assets, under the new definition we have made of holding companies. There is something in what the hon. Member for Stockport (Sir A. Gridley) has said about it being a matter of common sense, but one of these undertakings has a capital of about £2,500,000 and practically all of it is electrical. Secondly, if a company feels it cannot carry on with gas alone and

without electricity it is free to opt to be taken over as a whole. I cannot go farther than saying that I will think over the points the hon. Gentleman has made on the second Amendment, but I am afraid I cannot give a definite undertaking now.

Colonel Crosthwaite-Eyre: I did not think the Parliamentary Secretary's statement was very satisfactory. He has in effect said that we on this side ask them to' take over holding companies. I think that was a slip of the tongue but I would make it clear that we on this side have never asked him to take over these companies. We asked for certain companies to be excluded when we discussed it in Committee. I cannot see that these holding companies should not be treated just as any other shareholder is treated. Why should they not be paid out? The Parliamentary Secretary said he wants managerial experience. That seems to be a very poor reason. Shareholders of holding companies may have other ideas of what should be done. He says he is going to perpetuate injustice in order to secure this particular advantage he wants for himself, or the Government want for themselves under this Bill. That does not seem to be a logical or reasonable argument. We should expect, and have every right to expect, holding companies which, in fact, are exactly equivalent to shareholders, to be treated in the same way and for this differentiation to be made does not seem to us to be reasonable.
I would go further. Holding companies under previous Measures, such as Cable and Wireless, have been exempt and are starting in spheres of activity which are highly useful and it seems that holding companies in the electrical field could do the same. If they are to be taken over and abolished, according to the Parliamentary Secretary's own words, so that managerial experience may be available to the electricity board, it was not reasonable. If they want managerial experience, let them compete for it and obtain it from the open market. They could do that on terms as favourable as anyone else but to abolish the existing enterprises so as to force on the market this sort of type of experience seems to be quite unjustified. It seems to me that there is no real reason for taking them over. They are merely being taken over to provide, on the cheap, something that the Minister desires in a


technical way. That seems to be inequitable and unjust. I hope that before we leave this someone from the Front Bench will produce a more positive reason than that of trying to get something on the cheap as they are now doing.

Mr. Palmer: I want to deal with the point about holding companies. There is another good reason why they should be taken over because very often they have a very vast practical technical organisation which has been, for a great number of years, integrated into the whole structure. I have Edmund-son's particularly in mind. Edmundson's have a large technical staff and a central testing department and fine facilities of a higher order than is available to the electrical supply industry. Not to take over holding companies and their organisations intact would seriously weaken the intention of this Bill. Therefore I, for the best practical reason, support the Government.

Sir A. Gridley: The argument of the hon. Member for Wimbledon (Mr. Palmer) is entirely fallacious. Under our Amendment the composite companies would remain unsevered until they could be taken over as a whole and no staff severance would arise.

Amendment to the proposed Clause negatived.

Clause added to the Bill.

NEW CLAUSE.—(Right of pre-emption for local authorities in respect of land-vested in an Electricity Board.)

(1) Where any land of a local authority vests by virtue of this Act in an Electricity Board, the local authority shall, for a period of ten years from the date of the vesting of the land, have the right of pre-emption conferred by the subsequent provisions of this section.

(2) If the Electricity Board in whom the land vests by virtue of this Act, or any other Electricity Board to whom it is subsequently transferred, desire within the said period of ten years, to dispose to any person other than an Electricity Board, whether absolutely or for a term of years, of any of that land as being land not required by the Board for the discharge of their functions under this Act, they shall before disposing of it give to the local authority at least three months' notice, stating whether they desire to dispose of it absolutely and, if not, stating the terms of years for which they desire to dispose of it.

(3) Where the local authority receive a notice under subsection (2) of this section and notify the Board, before the expiration of the period

of three months from the date of the Board's notice, that they desire to acquire the land either absolutely or for the term of years specified in the Board's notice, as the case may be, they shall have the right and be under an obligation to acquire that land on such terms as may be agreed between the Board and the authority or, in default of agreement, as may be determined by arbitration to be fair and reasonable having regard to all the circumstances of the case.

(4) The right of pre-emption conferred upon the local authority by this section shall be deemed to be an estate contract within the meaning of section ten of the Land Charges Act, 1925, and that Act and the Land Registration Act, 1925, shall have effect accordingly. —[The Solicitor-General.]

Brought up, and read the First time.

1.15 a.m.

The Solicitor-General: I beg to move, "That the Clause be read a Second time."
The new Clause gives the local authority the right within a period of ten years to acquire back land which has been vested in an electricity board in the event of the electricity board desiring to dispose of it. The scheme of the Clause is this: if the board desires to dispose of that land, they must give notice to the local authority from which it was acquired, giving the terms on which they want to dispose of it, whether freehold or for a period of years; and the local authority, having received that notice, are given a right, if they wish to do so to acquire that land on the terms. The scheme is quite simple, and it gives what we feel to be a measure of justice to the local authorities to enable them, when land has been acquired from them and it turns out that it is really not needed, to get it back on terms. It gives them a preferential right so to do.

Mr. R. S. Hudson: I beg to move, as an Amendment to the proposed Clause, in line I, after "authority," insert:
or of any company which is not dissolved by this Act.
The Amendment seeks to extend a similar right to composite companies. In so far as they retain their gas undertakings, they will be forbidden by law to manufacture gas except on land scheduled. If the electricity company do not want the surplus land, it will be much cheaper for them to buy it back instead of having to go to the expense of getting more land scheduled.

The Solicitor-General: We feel that we can accept the principle of this Amendment, but we feel that we will have to recast it, because the words "composite companies" are used in another context. We do accept the principle of the Amendment, and that acceptance would, of course, affect a number of other Amendments on the Order Paper.

Mr. R. S. Hudson: I am much obliged to the Solicitor-General. In view of his assurance, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause added to the Bill.

NEW CLAUSE.—(Acquisition of non-statutory undertakings.)

(1) This section applies to any person, not being a body to whom Part II of this Act applies, who at the passing of this Act is engaged in supplying electricity to the general public and who, at any time after the nineteenth day of November, nineteen hundred and forty-five, has incurred or incurs, in respect of works approved by the Minister for the purposes of this section (whether before or after the execution of the works) expenditure properly chargeable to capital account; and in this section any such person is referred to as "the undertakers," and his business, so far as it consists of the supply of electricity to the general public, is referred to as "the electricity undertaking."

(2) The undertakers may, at any time before the expiration of the period of twelve months beginning with the date of the passing of this Act, serve on the Central Authority a notice requiring that the electricity undertaking shall be transferred under this section, and thereupon the following provisions of this section shall have effect.

(3) On such date, not being later than six months after the service of the notice, as may be agreed between the undertakers and the Central Authority or, in default of agreement, determined by the Minister (which date is hereafter in this section referred to as "the date of transfer "), all property of the undertakers which was, immediately before the date of transfer, wholly or mainly used for the purposes of the electricity undertaking shall, by virtue of this Act, vest in the Area Board whose area comprised the whole or the main part of the area of supply of the undertakers, and shall vest free of any mortgage or other incumbrance.

(4) For the purpose of transferring to the said Area Board agreements to which the undertakers were a party immediately before the date of transfer and which they entered into for the purposes of the electricity undertaking, so far as those agreements remain to be performed after the date of transfer, every such agreement, whether in writing or not, and whether or not of such a nature that rights, liabilities and obligations thereunder could be assigned by the undertakers shall

unless its terms or subject matter make it impossible, have effect, as from the date of transfer, subject to the like modifications (with the substitution of references to the date of transfer for references to the vesting date) as agreements of bodies to whom Part II applies which are transferred to the Area Board under that Part.

(5) The provisions of Part II of this Act relating to the disclaimer of agreements and leases shall apply to any agreements or leases which are transferred to the said Area Board under this section in like manner as they apply to agrements and leases of bodies to whom that Part applies, subject to the modification that for references to the vesting date there shall be substituted references to the date of transfer.

(6) Subject to the provisions of this section, there shall be paid by the Central Authority to the undertakers, by way of compensation for the transfer of the electricity undertaking, such amount as the undertaking might have been expected to realise if—

(a) it had been sold as a going concern on the date of transfer in the open market market by a willing seller to a willing buyer;
(b) the effect of the sale had been to transfer to the buyer the property, rights liabilities and obligations which are transferred or granted to the Area Board by or under this section, except any property or rights, which are transferred or granted on terms agreed or determined in accordance with regulations made under this section: and
(c) this Act had not been passed.

(7) Any question arising under this section as to—

(a) whether a particular person is a per son to whom this section applies;
(b) what property of the undertakers vests in the Area Board under subsection (3) of this section;
(c) what agreements of the undertakers are to have effect in accordance with sub section (4) of this section;
(d) what compensation is to paid under subsection (6) of this section;
shall, in default of agreement between the undertakers and the Central Authority, be determined by arbitration under this Act, and the provisions of Part II of this Act relating to the arbitration tribunal shall apply for the purpose of determining questions under this section and any questions which, under regulations made under this section, are to be determined by arbitration under this Act, as they apply for the purpose of determining questions under the provisions of Part II of this Act or any regulations made thereunder.

(8) Subsections (2) and () of section fourteen of this Act shall apply to the undertakers in like manner as they apply to a local authority subject to the modifications that for references to property held or used by the local authority in their capacity as authorized undertakers there shall be substituted references to property held or used by the undertakers for the purposes of the electricity undertaking and for references to the Minister of Health there shall be substituted references to the Minister.

(9) Regulations may make provision, in a case where property vested in an Area Board under this section was, immediately before the date of transfer, subject to a mortgage or other incumbrance, for the payment to the mortgagee or incumbrancer of the compensation or any part of the compensation payable in respect of that property, or may make other provision for the protection of mortgagees and incumbrancers of any such property.

(10) Where at the date of transfer any legal proceedings or any application to any authority under any enactment are pending by or against the undertakers in connection with any property, rights, liabilities or obligations which are vested in or transferred to an Area Board under this section, the Board, if the circumstances so require, may be added as a party to the proceedings or application or may be substituted for the undertakers as a party to the proceedings or application.

(11) Nothing in this section shall operate to transfer any cash or investments of the undertakers to an Area Board, and nothing in this section shall affect—

(a) any right, liability or obligation with respect to the borrowing of money by the undertakers or to the raising of money by the undertakers by the issue of securities;
(b) any right, liability or obligation (if the undertakers are a company) under any agreement for the rendering by any person of services to the undertakers, as a director (other than a managing director or a director whose functions are substantially those of an employee);
(c) any right to, or liability to pay, any debt which became due before, or was in respect of a consideration wholly executed before, the date of transfer; or
(d) any right to, or liability to pay, any damages which accrued before the date of transfer.

(12) Regulations may require any person who is or may be a person to whom this section applies to produce such books of account, records and documents, to supply copies of and extracts from such books, records and documents, and to furnish such other information as may reasonably be required—

(a) by the Minister for the purpose of ascertaining whether or not this section applies to that person, or for other purposes arising out of the provisions of this section; or
(b) by any Electricity Board for the purpose of facilitating the taking over of the electricity undertaking of that person by them on the date of transfer;
and to provide facilities for the examination of any such books, records and documents, and the taking of copies thereof and extracts there from and facilities for the verification of other information furnished under the regulations; and such regulations may make provision as to the manner, time and place in or on which any requirement under the regulations is to be complied with and shall provide for the payment to any such person of expenses reasonably incurred by him in complying with any requirements made by or under the regulations.

(13) For the purposes of this section, a person, shall, when supplying electricity to any other person, be deemed to be supplying electricity to the general public unless the electricity is supplied for the purposes of a trade or business and the relationship between the person giving the supply and the person supplied is that of a holding company and a subsidiary company, or vice versa, or either of the said persons is in some other way, able to exercise a substantial measure of control over the carrying on of the trade or business of the other person, and any question as to whether a supply of electricity to any person is a supply to the general public shall, in default of agreement between the undertakers and the Central Authority, be determined by arbitration under this Act.

(14) The foregoing provisions of this section shall, in their application to any undertakers whose area of supply is wholly or mainly comprised in the North of Scotland District, have effect with the substitution for references to the Minister of references to the Secretary of State, and for references to the Central Authority or to an Area Board of references to the North of Scotland Board.—[Mr. Gaitskell.]

Brought up, and read the First time.

Mr. Gaitskell: I beg to move, "That the Clause be read a Second time."
In the Bill as originally drafted, no mention was made of these undertakings. We did not propose that they should be touched in any way by the changes that have been made. We took that view because we did not consider that, in the main, nationalisation affected their position, and we envisaged that they would continue much as in the past, and would compete, as far as they were able to do so, with, the area boards in the same way as they had competed in the past with municipal undertakings or companies. But in the course of our discussions in Committee—this is not a matter on which we have ever felt very strongly—and as a result of further consideration, we have come to the conclusion that, in certain conditions, it is desirable that non-statutory undertakings should be given the option of being taken over under the Bill. The conditions which we propose in this new Clause to lay down are, firstly, that they must be bona fide electricity supply undertakings and, secondly—more important perhaps—that they must have incurred capital expenditure since 19th November, 1935, on works approved by the Minister. The purpose of this second condition is really to ensure that we are getting into the position of statutory undertakings that are of some importance, and that their capital de-


velopment is of significance. It would be damaging to consumers if we were to discourage such capital development. My right hon. Friend the Minister explained —I think to meet a point put by hon. Members opposite in Committee—that he proposed to move an Amendment of this kind. I do not think there is anything else I need say in commenting on the Clause, which I hope goes some considerable way towards meeting the views expressed by the Opposition.

Mr. Birch: I would like to say one word on this new Clause. I think it can be generally welcomed, and, in particular, the method of compensation laid down in the Clause is to be welcomed, because it does precisely what we have been asking for—arbitration on the basis of a going concern. But I would like to ask the Parliamentary Secretary a question on the first provision that the companies can only come in if they have incurred capital expenditure approved by the Minister after 19th November, 1945. I would like to know in what sort of proportion the companies are likely to be brought in. What is the Minister's policy about this? The Committee will see the Minister has complete power to exclude any or every company under the wording at present. I would like to know before we part with this Clause how the policy is to be administered?

Colonel Clarke: I would like to support what has been said by my hon. Friend the Member for Flint (Mr. Birch). I feel that, as it stands, this provision is a little bit illogical. At the same time, I congratulate the Minister on having arrived at what I think is a straightforward and equitable solution of the problem in general. If the Minister would consider again the points that we have raised, we would be grateful.

Mr. Gaitskell: I cannot give a detailed and exact answer on how we shall administer this Clause. It really arises out of suggestions and arguments put forward by Members opposite that capital expenditure was being discouraged on account of the fears of non-statutory undertakings that they would encounter difficulties later on in competition with the area boards. Our approach has been that we must be sure that sort of thing does not happen. Therefore, we have had to take account

of their position in relation to consumers' demands. I do not think I can really say more than that.

Mr. Hobson: I think it is to be welcomed that non-statutory undertakings can, if they desire, now be acquired; but I rather deplore that the Minister himself has not seen fit to acquire some of the non-statutory undertakings. I refer, in particular, to the railway generating stations. In the London area alone there are three large generating stations with a total capacity of nearly half-a-million kilowatts. The annoying thing is that the Electricity Commissioners have already contributed towards the cost of installation of turbines and the standardisation of frequencies, and they are in a position to export and import current. I think it ought to be done. I can foresee in the future that there will be considerable departmental strife as between the Transport Board and the Electricity Authority, and it seems to me that these non-statutory undertakings, the railway power stations, which are capable of supplying electricity for both domestic and industrial purposes, should have been absorbed. The new Clause should have been framed in such a way as to give the Minister power to acquire non-statutory as well as statutory undertakings.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Composite Companies.)

(1) This section applies to the companies (in this Act referred to as "composite companies") who are specified in Part II of the Schedule (Authorised undertakers to whom Part II of Act applies) to this Act, being companies who, by virtue of any enactment supply gas, or gas and water, as well a electricity:
Provided that this section shall not apply to any such company who serve on the Minister, not later than two months after the passing of this Act, a notice stating that they do not wish this section to apply to them, and references in this Act, except in the said Schedule, to composite companies shall not be construed as referring to any company who have served such a notice.

(2) The provisions of section thirteen of this Act shall, in the case of composite companies, only apply to property held or used by the company wholly or mainly in their capacity as authorised undertakers, and to rights, liabilities and obligations acquired or incurred by the company in the said capacity, and accordingly references in that section to the property, rights, liabilities and obligations of a body to whom Part II of this Act applies,


or to any agreement to which any such body was a party, or to documents referring to any such body, or to legal proceedings or applications by or against any such body shall be construed as references to property held or used by the company wholly or mainly in their capacity as authorised undertakers, and rights, liabilities and obligations acquired or incurred by the company in the said capacity or, as the case may be, to agreements, documents, legal proceedings or applications of or relating to the company in their capacity as authorised undertakers, and subsection (13) of the said section shall not apply to any composite company.

(3) Any questions arising under this section as to whether any property is or was held or used by a composite company wholly or mainly in their capacity as authorised undertakers or whether any rights, liabilities or obligations were acquired or incurred by any such company in the said capacity or whether any agreements or documents relate to any such company in the said capacity or whether any agreements or documents relate to any such company in the said capacity shall, in default of agreement, be determined by arbitration under this Act, and the arbitration tribunal shall have regard to whether or not entries relating to any property, rights or liabilities were or ought to have been included in the accounts furnished by the company to the Electricity Commissioners under section nine of the Electric Lighting Act, 1882.

(4) Subsections (2) and () of section fourteen of this Act shall apply to a composite company in like manner as they apply to a local authority, subject to the modification that for references to the Minister of Health there shall be substituted references to the Minister.

(5) Regulations may make provision—

(a) for the apportionment of, and the making of financial adjustments with respect to, any liabilities incurred by a composite company partly in their capacity as authorised undertakers and partly in other capacities, and for any necessary variation of mortagages and incumbrances relating to such liabilities; and
(b) for the apportionment of cash and investments held by a, composite company partly in their capacity aforesaid and partly in other capacities.

(6) Where any property of a composite company which vest's by virtue of this Act in an Electricity Board is subject to any mortgage or other incumbrance created for the purpose of securing a debt which does not' so vest in the Board and is not apportioned as between the Board and the company, the property shall vest free of that mortgage or incumbrance.

(7) The Electricity Board in whom any property, rights, liabilities or obligations of any composite company vest by virtue of this Act shall make available to the company such facilities for the examination of and the making of extracts from or copies of books, accounts and documents relating to the electricity undertaking of the company as the company may reasonably require for the purposes of this Act and for other purposes

arising out of the carrying on of the company's business, and such services of officers of the, Board as they may reasonably require to enable them to make use of those facilities. —[Mr. Gaitskell.]

Brought up, and read the First time.

1.30 a.m.

Mr. Gaitskell: I beg to move, "That the Clause be read a Second time."
This is another matter upon which we have never felt very strongly and upon which we have changed our minds. In the Bill as originally drafted, there was no specific provision for the separation of gas, or, for that matter, water, from the electricity part of undertakings. We took the view that perhaps the simplest way was to take them over, as the gas industry would like them to be nationalised in due course; and, for the time being, to have the gas side of the undertaking managed separately, to be passed on in due course to the new organisation set up. But we had to consider the matter in the light of the particular views represented to us by some of the larger composite companies, who pointed out that it would be awkward for the gas undertakings we were to take over, to be separated, from the undertakings by which they were controlled.
It was really the problem of the gas holding companies which brought us to the conclusion that our original plan would not be entirely unsatisfactory, and accordingly, we devised a method by which only the electricity part of the undertakings would be taken over, unless, of course, the companies themselves opted, as they have a right to do, to be taken over as a whole. That is the purpose of this new Clause. The proposal which the right hon. Gentleman the Member for Southport (Mr. R. S. Hudson) made, that Clause 14 should apply in this case is, I think he will find, taken care of in the actual words of the new Clause.

Clause read a Second time, and added to the Bill.

NEW CLAUSE (Compensation to composite companies.)

(1) Every composite company shall be entitled to be paid by the Central Authority, by way of compensation for the vesting in that Authority or in any other Electricity Board of property and rights of the company, and in lieu of any other compensation in respect of that vesting, an amount calculated as follows:—



(a) the aggregate value of all the securities of the company shall be ascertained in accordance with subsections (2) to (9) of section seventeen of this Act, subject to the modification that for the references in subsections (6) and (7) to the stockholders' representative there shall be substituted references to the company;
(b) there shall be ascertained the proportion which the average net revenue earned by the electricity undertaking in respect of the last three complete financial years before the tenth day of January, nineteen hundred and forty-seven, bears to the average net revenue earned in respect of those years by the company's undertaking as a whole;
(c) the amount of the compensation shall be an amount bearing to the aggregate value of the said securities the same proportion as the said average net revenue of the electricity undertaking bears to the said average net revenue of the company's undertaking as a whole.

(2) Any question arising under paragraph (b) of the last foregoing subsection shall, in default of agreement between the company and the Minister, be determined by arbitration under this Act.

(3) The right of a composite company to compensation under this section shall be satisfied by the issue to the company of British Electricity Stock of such amount as in the opinion of the Treasury is at the vesting date of a value equal to the amount calculated under subsection (I) of this section, regard being had (in estimating the value of the stock so issued) to the market value of government securities at the vesting date.

(4) If, in the case of any composite company, the amount of compensation payable to the company under this section has been determined before the vesting date, the British Electricity Stock to be issued in respect thereof shall be issued on that date, and in any other case the British Electricity Stock shall be issued as soon as the amount of that compensation has been determined.

(5) Interest on any stock so issued after the vesting date shall begin to accrue as from the vesting date, and the Central Authority shall, on such dates as the Minister may direct, make to the company payments of interest not exceeding the amount which, in the opinion of the Central Authority, will be found to have accrued on the British Electricity Stock ultimately issued in satisfaction of the compensation.

If the amounts paid to any company by the Central Authority under this subsection are equal to or greater than the amount of interest which is found to have accrued on the said stock for the period beginning with the vesting date and ending immediately before the date of the issue of the stock, the interest so found to have accrued shall be treated as discharged, and if the amount paid as aforesaid is less than the amount found to have accrued as aforesaid, the amount so found to have accrued shall be treated as discharged to the extent of the amount so paid, and the balance shall be added to and treated as part of the interest (being interest accruing on and after the issue of the stock) which first falls to be paid after the issue of that stock.

(6) Regulations may make provision—

(a) for entitling the holder of any debentures, debenture stock, preference shares or preference stock of a composite company, by notice given within the prescribed period, to require the company to transfer to him such amount of the British Electricity Stock issued to the company under this section as is attributable to the value of the said securities held by him, and for the cancellation of those securities to a proportionate extent; and
(b) otherwise for the protection of mortgagees and incumbrancers of a composite company.—[Mr. Glenvil Hall.]

Brought up, and read the First time.

Mr. Glenvil Hall: I beg to move, "That the Clause be read a Second time."
This new Clause is a corollary to the one which the Committee has accepted. It deals with the composite companies familiar to us all. It sets out the formula for the assessment of compensation for the electricity part to be taken over from these composite companies and the basis laid down is that set forth in Clause 17 with, of course, necessary changes. Unless the Committee desires it, I will not go through the formula; it is rather a complicated one. It is rather in favour of the company than of the Electricity Authority.

Clause read a Second time, and added to the Bill.

NEW SCHEDULE.—(Authorised Undertakers to whom Part II of Act applies.)

Part I.

Public and Local Authorities and Companies (other than Composite Companies).

Aberayon and District Electricity Supply and
Power Co. Ltd.
Aberdare Urban District Council.
Aberdeen Corporation.
Abertillery Urban District Council.
Aberystwyth Corporation.
Accrington Corporation.
Adwick-le-Street Urban District Council.
Airdrie Corporation.
Aldeburgh Electric Supply Co. Ltd.
Alderley Edge &amp; Wilmslow Electricity Board.
Aldershot Corporation.
Alton District Electricity Co. Ltd.
Altrincham Electric Supply, Ltd.
Amble Urban District Council.
Ammanford Urban District Council.
Ashbourne Urban District Council.
Ashford Urban District Council.
Ashton-in-Makerfield Urban District Council.
Ashton-under-Lyne Corporation.
Askrigg &amp; Reeth Electric Supply Co. Ltd.
Atherton Urban District Council.
Aylesbury Corporation.
Ayrshire Electricity Board.


Bacup Corporation.
Bangor Corporation.
Barking Corporation.
Barnes Corporation.
Barnoldswick Urban District Council.
Barnsley Corporation.
Barnstaple Corporation.
Barrow-in-Furness Corporation,
Barry Corporation.
Basingstoke Corporation.
Bath Corporation.
Batley Corporation.
Battersea Borough Council.
Beckenham Corporation.
Bedford Corporation.
Bedfordshire, Cambridgeshire &amp; Huntingdonshire Electricity Co.
Bed was and Machen Urban District Council.
Bedwellty Urban District Council.
Bermonsey Borough Council.
Bethesda Urban District Council.
Bethnal Green Borough Council.
Bexhill Corporation.
Bexley Corporation.
Bideford &amp; District Electric Supply Co. Ltd
Bingley Urban District Council.
Birkenhead Corporation.
Birmingham Corporation.
Blackburn Corporation.
Blackpool Corporation.
Bland ford Forum &amp; District Electric Supply Co. Ltd.
Bolsover Urban District Council.
Bolton Corporation.
Borrowstounness Corporation.
Borth &amp; Ynyslas Electric Supply Co. Ltd.
Boston &amp; District Electric Supply Co. Ltd.
Bournemouth Corporation.
Bournemouth &amp; Poole Electricity Supply Co Ltd.
Bradford Corporation.
Bredbury and Romiley Urban District Council
Brentford &amp; Chiswick Corporation.
Brentford Electric Supply Co. Ltd.
Brentwood District Electric Co. Ltd.
Bridgend Urban District Council.
Bridgwater &amp; District Electric Supply &amp; Traction Co. Ltd.
Bridlington Corporation.
Bridport Corporation.
Brierfield Urban District Council.
Brighouse Corporation.
Brighton Corporation,
Bristol Corporation.
Bromley Corporation.
Buckie Corporation.
Buckrose Light &amp; Power Co. Ltd.
Bude Electric Supply Co. Ltd.
Burford Electric Light &amp; Power Co Ltd
Burgess Hill Electricity Ltd.
Burnham &amp; District Electric Supply Co. Ltd
Burnley Corporation.
Burton-upon-Trent Corporation
Bury Corporation.
Buxton Corporation.
Caernarvon Corporation.
Caerphilly Urban District Council
Calne Corporation.
Cambridge Electric Supply Co. Ltd.
Campbeltown and Mid-Argyll Electric Supply Co. Ltd.
Cannock Urban District Council
Canterbury Corporation.
Cardiff Corporation.

Cardiff Rural District Council.
Cark &amp; District Electricity Co. Ltd
Carlisle Corporation.
Carmarthen Electric Supply Co. Ltd
Castleford Urban District Council
Central Electricity Board.
Central London Electricity Ltd
Central Sussex Electricity Ltd.
Chasetown &amp; District Electricity Co. Ltd
Cheadle &amp; Gatley Urban District Counc il
Cheltenham Corporation.
Chepstow Electric Lighting &amp; Power Co. Ltd
Chesham Electric Light &amp; Power Co. Ltd
Chester Corporation.
Chesterfield Corporation.
Chichester Corporation
Chislehurst Electric Supply Co. Etcl.
Chudleigh Electric Light &amp; Power Co. Ltd.
City of London Electric Lighting Co Ltd
Clacton Urban District Council.
Cleethorpes Corporation.
Clitheroe Corporation.
Clyde Valley Electrical Power Co.
Coatbridge Corporation.
Colchester Corporation.
Colne Corporation.
Colne Valley Electric Supply Co. Ltd.
Colne Valley Urban District Council.
Colwyn Bay Corporation.
Congleton Corporation.
Connah's Quay Urban District Council.
Conway Corporation.
Cornwall Electric Power Co.
County of London Electric Supply Co. Ltd.
Coventry Corporation.
Craven Hydro-Electric Supply Co. Ltd
Crewe Corporation.
Crieff Electric Supply Co. Ltd.
Crook and Willingdon Urban District Council
Croydon Corporation.
Culm Valley Electric Supply Co. Ltd.
Cwmbran Urban District Council
Darlington Corporation.
Dartford Corporation.
Darwen Corporation.
Dawlish Electric Light &amp; Power Co. Ltd
Dearne District Electricity Board.
Denny &amp; Dunipace Corporation.
Derby Corporation.
Derbyshire &amp; Nottinghamshire Electric Power Co.
Dewsbury Corporation.
Dolgelly Urban District Council.
Doncaster Corporation.
Dorchester Corporation.
Dover Corporation.
Dumbarton Corporation.
Dumfries Corporation.
Dumfriesshire County Council.
Dunbartonshire County Council.
Dundee Corporation.
Dunoon &amp; District Electricity Supply Co. Ltd.
Ealing Corporation.
Earby Urban District Council.
East Anglian Electric Supply Co. Ltd
East Dereham Urban District Council.
East Devon Electricity Co. Ltd.
East Grinstead Urban District Council.
East Ham Corporation.
East Retford Corporation.
East Suffolk Electricity Distribution Co. Ltd.
Eastbourne Corporation.
Ebbw Vale Urban District Council.
Eccles Corporation.
Edinburgh Corporation.


Egham &amp; Staines Electricity Co. Ltd.
Electric Supply Corporation, Ltd.
Electrical Distribution of Yorkshire, Ltd.
Electricity Distribution of North Wales &amp; District, Ltd.
Elland Urban District Council.
Epsom &amp; Ewell Corporation.
Erith Corporation.
Eston Urban District Council.
Exe Valley Electricity Co. Ltd.
Exeter Corporation.
Falkirk Corporation.
Fareham Urban District Council.
Farnworth Corporation.
Faversham Corporation.
Felixstowe Urban District Council.
Fife Electric Power Co.
Finchley Corporation.
First Garden City, Ltd.
Fleetwood Corporation.
Folkestone Electricity Supply Co. Ltd.
Foots Cray Electricity Supply Co. Ltd.
Formby Urban District Council.
Fort William Corporation.
Frinton-on-Sea &amp; District Electric Light &amp; Power Co. Ltd.
Fulham Borough Council.
Gainsborough Urban District Council.
Galloway Water Power Co.
Gellygaer Urban District Council.
Gillingham Corporation.
Glasgow Corporation.
Gloucester Corporation.
Gorseinon Electric Light Co. Ltd.
Grampian Electricity Supply Co.
Grange Urban District Council.
Gravesend Corporation.
Great Yarmouth Corporation.
Greenock Corporation.
Grimsby Corporation.
Guildford Corporation.
Guisborough Urban District Council.
Hackney Borough Council.
Halifax Corporation.
Hamilton Corporation.
Hammersmith Borough Council.
Hampstead Borough Council.
Harrogate Corporation.
Harwich Corporation.
Haslingden Corporation.
Hastings Corporation.
Hawarden Rural District Council.
Hawes Electric Lighting Co. Ltd.
Hazel Grove &amp; Bramhall Urban District Council.
Hebden Royd Urban District Council.
Heckmondwike Urban District Council.
Helensburgh Corporation.
Herne Bay &amp; District Electricity Supply Co. Ltd.
Hertford Corporation.
Heston &amp; Isleworth Corporation.
Heywood Corporation.
High Wycombe Corporation.
Hindley Urban District Council.
Hitchin Urban District Council.
Holmfirth Urban District Council.
Holsworthy Electric Supply Co. Ltd.
Holyhead Urban District Council.
Horley &amp; District Electricity Supply Co. Ltd
Hornsey Corporation.
Horsham Urban District Council.
Horwich Urban District Council.
Hove Corporation.
Hoylake Urban District Council.

Huddersfield Corporation.
Ilford Corporation.
Ilfracombe Electric Light &amp; Power Co. Ltd.
Ilkley Urban District Council.
Inverness Corporation.
Ipswich Corporation.
Isle of Wight Electric Light &amp; Power Co. Ltd.
Islington Borough Council.
Keighley Corporation.
Kendal Corporation.
Kent Electric Power Co.
Keswick Electric Light Co. Ltd.
Kettering Corporation.
King's Lynn Corporation.
Kingston-upon-Hull Corporation.
Kingston-upon-Thames Corporation.
Kirkcaldy Corporation.
Kirkcudbright County Council.
Lanarkshire County Council.
Lanarkshire Hydro-Electric Power Co.
Lancashire Electric Power Co.
Lancaster Corporation.
Leeds Corporation.
Leek Urban District Council.
Leicester Corporation.
Leicestershire &amp; Warwickshire Electric Power Co.
Leigh Corporation.
Lerwick Corporation.
Lewes &amp; District Electric Supply Co. Ltd.
Leyton Corporation.
Lichfield Corporation.
Lincoln Corporation.
Littleborough Urban District Council.
Liverpool Corporation.
Llandrindod Wells Urban District Council.
Llandudno Urban District Council.
Llanelly &amp; District Electric Supply Co. Ltd.
Llanfairfechan Urban District Council.
Llangollen Urban District Council.
Loch Leven Electricity Supply Co. Ltd.
London &amp; Home Counties Joint Electricity 'Authority.
London Electric Supply Corporation Ltd.
London Power Co. Ltd.
Long Eaton Urban District Council.
Lossiemouth and Brandenburgh Corporation.
Lothians Electric Power Co.
Loughborough Corporation.
Louth Corporation.
Lowestoft Corporation.
Luton Corporation.
Lyme Regis Corporation.
Lynton &amp; Lynmouth Electric Light Co. Ltd.
Lytham St. Anne's Corporation.
Macclesfield Corporation.
Machynlleth Electric Supply Co. Ltd.
Maesteg Urban District Council.
Maidenhead Corporation.
Maidstone Corporation.
Malvern Urban District Corporation.
Manchester Corporation.
Mansfield Corporation.
Margate, Broadstairs &amp; District Electricity Board.
Market Drayton Electric Light &amp; Power Co. Ltd.
Marlborough Corporation.
Marple Urban District Council.
Melton Mowbray Electric Light Co. Ltd.
Menai Bridge Urban District Council.
Mersey Power Co. Ltd.
Merthyr Electric Traction &amp; Lighting Co. Ltd.
Metropolitan Electric Supply Co. Ltd,
Mexborough Urban District Council.


Mid-Cheshire Electricity Supply Co. Ltd.
Mid-Cumberland Electricity Co. Ltd.
Mid-Lincolnshire Electric Supply Co. Ltd.
Mid-Somerset Electric Supply Co. Ltd.
Middlesbrough Corporation.
Middleton Corporation.
Midland Electric Corporation for Power Distribution Ltd.
Midland Electric Light &amp; Power Co. Ltd.
Milford-on-Sea Electric Supply Co. Ltd.
Milford Haven Urban District Council.
Millom Rural District Council.
Milnrow Urban District Council.
Milton &amp; Barton-on-Sea (Hants) Electricity Supply Co. Ltd.
Minehead Electric Supply Co. Ltd.
Mirfield Urban District Council.
Mold Urban District Council.
Monmouth Electricity Co. Ltd.
Morecambe &amp; Heysham Corporation.
Morley Corporation.
Motherwell &amp; Wishaw Corporation.
Mountain Ash Urban District Council.
Musselburgh &amp; District Electric Light &amp; Traction Co. Ltd.
Mynyddislwyn Urban District Council.
Neath Corporation.
Neath Rural District Council.
Nelson Corporation.
New Mills Urban District Council
Newark Corporation.
Newcastle &amp; District Electric Lighting Co. Ltd.
Newcastle-under-Lyme Corporation.
Newcastle-upon-Tyne Corporation.
Newmarket Electric Light Co. Ltd.
Newport Corporation (Mon.).
Newtown-le-Willows Urban District Council
Normanton Urban District Council.
North Berwick Corporation.
North-Eastern Electric Supply Co. Ltd.
North Lincolnshire &amp; Howdenshire Electricity Co. Ltd.
North of Scotland Electric Light &amp; Power Co. Ltd.
North Somerset Electric Supply Co. Ltd.
North Wales and South Cheshire Joint Electricity Authority.
North Wales Power Co. Ltd.
North West Midlands Joint Electricity Authority.
Northampton Electric Light &amp; Power Co. Ltd
Northmet Power Co.
Northwood Electric Light &amp; Power Co. Ltd.
Norwich Corporation.
Notting Hill Electric Lighting Co. Ltd.
Nottingham Corporation.
Nuneaton Corporation.
Oban Corporation.
Ogmore &amp; Garw Urban District Council.
Oldham Corporation.
Ormskirk Electric Supply Co. Ltd.
Ossett Corporation.
Oswestry Corporation.
Oxford Corporation.
Padiham Urban District Council.
Paignton Electric Light &amp; Power Co. Ltd.
Paisley Corporation.
Peacehaven Electric Light &amp; Power Co. Ltd
Penarth Urban District Council.
Penmaenmawr Urban District Council.
Penrith Electric Supply Co. Ltd.
Penybont Rural District Council.
Perth Corporation.
Peterborough Corporation.

Peterhead Electricity Co. Ltd.
Petersfield Electric Light &amp; Power Co. Ltd.
Plymouth Corporation.
Plympton St. Mary Rural District Council.
Pontardawe Rural District Council.
Pontypool Electric Light &amp; Power Co. Ltd.
Pontypridd Urban District Council.
Poplar Borough Council.
Port Talbot Corporation.
Porthcawl Electricity Co, Ltd.
Portland Urban District Council.
Portsmouth Corporation.
Prestatyn Urban District Council.
Preston Corporation.
Pudsey Corporation.
Radcliffe Corporation.
Ramsgate &amp; District Electric Supply Co. Ltd
Rawtenstall Corporation.
Reading Corporation.
Redcar Corporation.
Reigate Corporation.
Rhondda Urban District Council.
Rhyl Urban District Council.
Richmond (Surrey) Electric Light &amp; Power Co Ltd.
Richmond (Yorks) Corporation.
Ringmer &amp; District Electricity Co. Ltd.
Ringwood Electric Supply Co. Ltd.
Risca Urban District Council.
Rochdale Corporation.
Rotherham Corporation.
Rugby Corporation.
Rushden &amp; District Electric Supply Co. Ltd.
Ruthin Corporation.
St. Austell &amp; District Electric Lighting &amp; Power Co. Ltd.
St. Helens Corporation.
St. Marylebone Borough Council.
St. Pancras Borough Council.
Sale Corporation.
Salford Corporation.
Salisbury Electric Light &amp; Supply Co. Ltd.
Scarborough Corporation.
Scottish Central Electric Power Co.
Scottish Midlands Electricity Supply Ltd.
Scottish Southern Electric Supply Co. Ltd.
Scunthorpe Corporation.
Seaford &amp; Newhaven Electricity Ltd.
Seaham Urban District Council.
Seaton and District Electric Light Co. Ltd.
Sedbergh Electricity Supply Co. Ltd.
Settle and District Electricity Co. Ltd.
Sevenoaks &amp; District Electricity Co. Ltd.
Sheerness &amp; District Electric Supply Co. Ltd.
Sheffield Corporation.
Shipley Urban District Council.
Shoreditch Borough Council.
Shoreham &amp; District Electric Lighting &amp; Power Co. Ltd.
Shropshire, Worcestershire &amp; Staffordshire Electric Power Co.
Skelmorlie Electric Supply Co. Ltd.
Skelton and Brotton Urban District Council.
Skipton Urban District Council.
Sleaford Urban District Council.
Slough &amp; Datcher Elactric Supply Co. Ltd.
South Cumberland Electricity Supply Co. Ltd.
South-East Kent Electric Power Co. Ltd.
South-East Yorkshire Light &amp; Power Co. Ltd.
South London Electric Supply Corporation, Ltd.
South Metropolitan Electric Light &amp; Power Co, Ltd.
South Shields Corporation.


South Somerset &amp; District Electricity Co. Ltd.
South Wales Electric Power Co.
Southampton Corporation.
Southend-on-Sea Corporation.
Southport Corporation.
Southwark Borough Council.
Spalding Urban District Council.
Spenborough Urban District Council.
Stafford Corporation.
Stalybridge, Hyde, Mossley &amp; Dukinfield Transport &amp; Electricity Board.
Stanley Urban District Council.
Stepney Borough Council.
Steyning Electricity Ltd.
Stirling Corporation.
Stockport Corporation.
Stockton-on-Tees Corporation.
Stoke Newington Borough Council.
Stoke-on-Trent Corporation.
Stone Urban District Council.
Stornoway Electric Supply Co. Ltd.
Strathclyde Electricity Supply Co. Ltd.
Stretford &amp; District Electricity Board.
Stroud Electric Supply Co. Ltd.
sunderland Corporation.
Sussex Electricity Supply Co. Ltd.
Sutton Coldfield Corporation.
Swansea Corporation.
Swindon Corporation.
Swinton &amp; Pendlebury Corporation.
Tadcaster Electricity Co. Ltd.
Tamworth District Electric Supply Co. Ltd
Taunton Corporation.
Teignmouth Electric Lighting Co. Ltd
Thornbury &amp; District Electricity Co. Ltd.
Thornton Cleveleys Urban District Council
Thurrock Urban District Council.
Thurso &amp; District Electric Supply Co. Ltd.
Tiverton Corporation.
Tobermory Corporation.
Todmorden Corporation.
Tonbridge Urban District Council
Torquay Corporation.
Towyn, Aberdovey and District Electricity Co. Ltd.
Tredegar Urban District Council.
Trent Valley &amp; High Peak Electricity Co. Ltd.
Tunbridge Wells Corporation.
Turton Urban District Council.
Tynemouth Corporation.
Ulverston Urban District Council
Urban Electric Supply Co. Ltd.
Uttoxeter Urban District Council.
Uxbridge &amp; District Electric Supply Co. Ltd.
Wakefield Corporation.
Wallasey Corporation.
Walsall Corporation.
Walthamstow Corporation.
Walton and Weybridge Urban District Council.
Warmley Rural District Council.
Warrington Corporation.
Watford Corporation.
Weald Electricity Supply Co. Ltd.
Wellingborough Electric Supply Co. Ltd.
Wellington District Electricity Co. Ltd
Welwyn Garden City Electricity Supply Co. Ltd.
Wessex Electricity Co.
West Bromwich Corporation.
West Cambrian Power Co. Ltd.
West Devon Electric Supply Co. Ltd.
West Gloucestershire Power Co. Ltd.
West Ham Corporation.

West Hampshire Electricity Co. Ltd.
West Hartlepool Corporation.
West Kent Electric Co. Ltd.
West Lothian County Council.
West Midlands Joint Electricity Authority.
West Riding Automobile Co. Ltd.
Westmorland and District Electricity Supply Co. Ltd.
Weston-super-Mare &amp; District Electric Supply Co. Ltd.
Weymouth and Melcombe Regis Corporation.
Whitby Urban District Council.
Whitehaven Corporation.
Whitstable Electric Co. Ltd.
Whitworth Urban District Council.
Wick Corporation.
Wickford &amp; District Electricity Supply Co. Ltd.
Wigan Corporation.
Wigtownshire Electricity Co. Ltd.
Willesden Corporation.
Wilton Electricity Supply Co. Ltd.
Wimbledon Corporation.
Winchester Corporation.
Windermere &amp; District Electricity Supply Co Ltd.
Windsor Electrical Installation Co. Ltd.
Wisbech Electric Light &amp; Power Co. Ltd
Witney Urban District Council.
Woking Electric Supply Co. Ltd
Wolverhampton Corporation.
Woodstock &amp; District Electrical Distribution Co. Ltd.
Woolwich Borough Council
Worcester Corporation.
Workington Corporation.
Worksop Corporation.
Worthing Corporation.
Wrexham Corporation.
Yale Electric Power Co. Ltd
York Corporation.
Yorkshire Electric Power Co

Part II.

Composite Companies

Ascot District Gas &amp; Electricity Co.
Bognor &amp; District Gas &amp; Electricity Co.
Brixham Gas &amp; Electricity Co-
Bungay Gas &amp; Electricity Co.
Farnham Gas &amp; Electricity Co.
Guildford Gas Light &amp; Coke Co.
Mid Southern Utility Co.
Oakham Gas &amp; Electricity Co. Ltd.
Salcombe Gas &amp; Electricity Co. Ltd.
Whitchurch (Hants) Gas &amp; Electricity Co. Ltd.
Uckfield Gas &amp; Electricity Co.
Yorktown (Camberley) Gas &amp; Electricity Co.— [Mr. Gaitskell.]

Brought up, and read the First time.

Mr. Gaitskell: I beg to move, "That the Schedule be read a Second time."
As the Committee will be aware, this new Schedule contains a list of authorised undertakers which we propose should be taken over under the Bill., It is not, of course, a complete list of all the undertakings because, as I explained earlier, we are also taking over several power station companies and the holding com-


panies, but it is a list of authorised undertakings, a description of which is provided in the earlier new Clause which I moved. There is perhaps no ^need for me to say very much. I might just refer to Part II, which lists composite companies. These are those which have gas or water supplies and they are put in a separate class simply for convenience. I think the Committee generally will agree that this is more satisfactory and a clearer way of dealing with the position than leaving it to some entirely general definition. It is true that it takes up a lot more paper and has involved us in a little more time, but it has the merit that, so far as the authorised undertakings are concerned, they know exactly where they stand. I do not think there is any serious question that is likely to arise.
Perhaps I might further inform the Committee of one or two things which may not be entirely clear from my earlier remarks on the new Clause. We do not include, in this list of various undertakings, certain companies which supply electricity mainly for their own use or the use of their parent companies. We have in mind the Lochaber Power Company, which supplies power for a large aluminium works which is a new feature of industrial development in Scotland. We have also managed to exclude, in the proviso, local authorities supplying electricity for their own transport undertakings. Indeed, it was on this point that we had the greatest difficulty with our definition, because our legal advisers told us that the Opposition's definition to define authorised undertakers as bodies which supplied the general public was not, unfortunately, satisfactory or adequate because "general public" appears to include local tramway or other transport undertakings. Therefore, the Government had to start thinking again and they are very definitely excluded by means of the admirable device of the Schedule. We also exclude from the list companies which carry on transport undertakings but do not supply electricity under a provisional or special order. The object of this proviso is to exclude companies such as the South Lancashire Transport Company, which is primarily a transport undertaking, but which supplies electricity by virtue of a Private Act, but not under a provisional or special order.

Schedule read a Second time, and added to the Bill.

Bill, as amended, to be reported.

Bill reported, with Amendments; as amended (in the Standing Committee and on re-committal), considered; to be read the Third time upon Monday next, and to be printed. [Bill 90.]

Orders of the Day — WAYS AND MEANS

[23rd June]

Resolutions reported:

Orders of the Day — PURCHASE TAX (ROAD VEHICLES)

"That, as from the eighteenth clay of June, nineteen hundred and forty-seven, and subject to any subsequent order under Section twenty of the Finance (No. 2) Act, 1940, purchase tax shall be charged at an intermediate rate equal to two-thirds of the value of the goods, in respect of mechanically propelled passenger road vehicles of a retail value of more than one thousand two hundred and eighty pounds a vehicle, the retail value of a vehicle and the articles to be treated as forming part thereof being ascertained in such manner as may be provided by or under any Act of the present Session relating to Finance and so as to include value attributable to payment of tax at the basic rate.

In this Resolution the expression "passenger road vehicles" means road vehicles constructed or adapted solely or mainly for the carriage of passengers, or having, to the rear of the driver's seat, roofed accommodation lit by side windows and fitted with, or constructed or adapted for the fitting of, seating for passengers."

Orders of the Day — EXCISE (MECHANICALLY PROPELLED VEHICLES)

Resolved:
That, as from the first day of January, nineteen hundred and forty-eight, the duties of excise chargeable under section thirteen of the Finance Act, 1920, in respect of mechanically propelled vehicles chargeable with such duties under paragraph 6 of the Second Schedule to that Act, other than electrically propelled vehicles, shall, in the case of such a vehicle registered under the Roads Act, 1920, for the first time on or after the first day of January, nineteen hundred and forty-seven, be charged at the rate of ten pounds for the vehicle."-—[Mr. Glenvil Hall.]

Instruction to any Committee to which the Finance Bill may be recommitted, that they have power to make provision therein pursuant to the said Resolutions. —[Mr. R. J. Taylor.]

Orders of the Day — SUNDAY CINEMATOGRAPH ENTERTAINMENTS

Resolved:
That the Order made by the Secretary of State for the Home Department, extending Section I of the Sunday Entertainments Act, 1932, to the Rural District of Blackwell, a copy of which Order was presented on 23rd June, be approved.
That the Order made by the Secretary of State for the Home Department, extending Section I of the Sunday Entertainments Act, 1932, to the Borough of Bridgnorth, a copy of which Order was presented on 23rd June, be approved.
That the Order made by the Secretary of State for the Home Department, extending Section I of the Sunday Entertainments Act, 1932, to the County Borough of Darlington, a copy of which Order was presented on 23rd June, be approved.
That the Order made by the Secretary of State for the Home Department, extending Section I of the Sunday Entertainments Act, 1932, to the County Borough of Ipswich, a copy of which Order was presented on 23rd June, be approved.
That the Order made by the Secretary of State for the Home Department, extending Section I of the Sunday Entertainments Act, 1932, to the City and County of Kingston-upon-Hull, a copy of which Order was presented on 23rd June, be approved.
That the Order made by the Secretary of State for the Home Department, extending Section I of the Sunday Entertainments Act, 1932, to the Rural District of Mildenhall, a copy of which Order was presented on 23rd June be approved."—[Mr. Oliver.]

Orders of the Day — VENEREAL DISEASE (OVERSEAS FORCES).

Motion made, and Question proposed, "That this House do now adjourn."— [Mr. J. Henderson.]

1.38 a.m.

Dr. Segal: I must apologise to the House for detaining hon. Members at this late hour, but this subject is one over which a good many families in this country have lost a considerable amount of sleep, so if hon. Members who remain lose another half-hour of sleep, they may perhaps regard it as being justified. I think it is best to approach the problem from the medical angle. It cuts so deeply at the root of many of the bases of our national life that it is highly desirable to avoid, as far as possible, anything in the nature of scare-mongering or sensationalism. Many hon. Members have received representations from several

quarters since the publication of figures during a Debate which occurred recently in another place.
At the outset, I should like to state my conviction that the British soldier is less prone to venereal disease than the soldiers of any Allied force. I base this claim on medical experience overseas during the war in various theatres, extending over a period of four and a half years, and in various combined units where the personnel of no fewer than eight Allied and Dominion Powers were represented. I think it advisable in dealing with this matter to avoid quoting statistics. I believe the statistics that have already been given elsewhere are subject to certain fallacies because, whereas they deal with the incidence of venereal disease over a period of 12 months per 1,000 men in a given Command, I think they fail to take into account that these 1,000 men over a period of 12 months were largely in a mobile state, with various changes taking place through posting and replacement. Hence over a period of 12 months the numbers were probably considerably increased. There is another reason why it is largely inadvisable to quote statistics in this connection. I believe that the actual incidence of venereal disease, although the figures quoted already are grave, are only symptomatic of a far graver problem.
I believe the real problem that faces us today is how far risks of exposure to disease have been taken for every given case of disease which has been recorded. With the wide dissemination of knowledge on this subject among troops of all Services, with the well-known methods of prophylaxis and early treatment, with the high percentage of cures and the relatively low proportion of relapses and recurrences, I think that even if the figures had been less serious than those actually given, they would still occasion grave disquiet They are symptomatic of a state of affairs that has followed in the wake of every major war and are a result of a general loosening of moral ties which affects many other countries today besides our own
In so far as this problem affects our troops stationed at home, it is not primarily the concern of the War Office. It is, firstly, the concern of the Church upon whom lies the responsibility of preaching incessantly the ideals of self-discipline and self-restraint, of a high


standard of moral values and of the sanctity of family life. A heavy responsibility rests upon the State in making higher standards of education available to as large a proportion of the population as possible; a responsibility also devolves upon the State to lay special emphasis on the provision of houses for newly-married couples, and to establish a graded system of family allowances with a rising scale whereby the amount would increase with each successive child; and, finally, a heavy responsibility rests upon each individual to inculcate higher ideals of family life and human values in his own particular family circle.
But in so far as this problem affects troops stationed overseas, it is primarily the responsibility of the War Office. In that connection the War Office acts as trustee on behalf of the nation for the welfare of all the troops committed to its care overseas, and I would like to ask the Minister two questions. How can he explain the relatively high rate of incidence of venereal disease in the Far East at a figure no less than six times as high as the rate in the Middle East? How far can he explain why the rate of venereal disease in Germany and Austria today is almost five times as high as the rate existing in the Middle East? These are questions which have caused great disquiet among many sections of our community. I think they are matters which may be explained to some extent by the state of affairs immediately following upon six years of war, but there are several suggestions which I would like to bring to the notice of the War Office.
I feel very strongly that it should be the aim of the War Office to encourage the recruit to retain as far as possible his civilian outlook during the brief term of his military service. I feel that a great deal more can be done in regard to the branches of the Services that deal with the moral and cultural well-being of the man in the Forces, particularly the three branches, welfare, chaplaincy and educational. I think these three branches should endeavour to form their civilian counterparts in each of the three services. During the war incalculable good was done in many parts of the world through the medium of civilian agencies which voluntarily cared for the welfare of our troops. In Kenya there was a scheme by

which troops on local leave were offered hospitality on English farms in the uplands of Kenya. Throughout Egypt and Palestine, civilian agencies established service clubs, arranged hospitality for troops in private families and organised tours in certain districts, entirely on a voluntary basis.
Cannot the War Office try to encourage similar activities even in occupied territories like Germany and Austria, in Greece, in Palestine, in India, in Malaya and even in Japan? In British Colonies today there will, surely, be no excuse for civilian organisations not doing their utmost to assist the moral and cultural welfare of our troops, by giving them an opportunity of contact with the healthy side of family life in normal surroundings. During the war some of the most harrowing experiences that occurred were instances of highly placed officers, after three agonised years of separation from their families at home, finally reaching the point of breaking down, and then afterwards harbouring the suspicion that their wives away in England had also been unable to overcome the various temptations that surrounded them. There were cases during the war where the whole efficiency of a squadron suffered as a result of the shock that a senior officer might have sustained. If we concede a certain moral code to one sex today, it is surely difficult to deny it also to the other sex, and if we face the implications of an individual sowing his wild oats and accept this principle on a national scale, there is no doubt that we shall ultimately undermine the whole future of our national life.
I urge the Minister to give some assurance to the many families in England today who feel profound disquiet at the figures which have been revealed in another place; and I urge him to realise that, in so far as the welfare of our troops overseas is concerned, the War Office acts as a trustee on behalf of our nation. I would ask him to endeavour to take such steps during the coming months as will substantially reduce the very disquieting figures which have been given to the public on this grave problem, and see that in the very near future very much less ground for uneasiness will exist in this country.

1.50 a.m.

The Under-Secretary of State for War (Mr. John Freeman): The few hon. Members remaining in the House at this very late hour will not, I think, seek to belittle in any way the importance of the subject which my hon. Friend has raised, and which he will be the first to admit can only just be touched on in an Adjourned Debate at this hour of the night. He has raised an issue of first-rate importance, and one which gives all of us who have any responsibility for the welfare of the Services considerable anxiety. Now, I would disagree with practically nothing which my hon. Friend has said. If I may say so with respect, I believe that his approach to the problem—and it is not a prophylactic but a positive approach, if I may put it in those terms —is the correct one. We shall only get over this difficulty by creating conditions in the Services overseas under which the temptation which leads to this particular scourge is less likely to arise. I applaud his decision not to get us involved this evening in a maze of statistics, which may be confusing; and I am certainly not going to rush in where he feared to tread.
I would, however, like to give the House one or two simple figures which I think may be instructive. There are two points I would like to make with these figures. The first is that, although I would not in any way under-estimate the seriousness of the problem, there is some ground for thinking that there is a periodic rise in the incidence of this disease which one tends to get after a war; and the second point is that we are perhaps past the peak period. I would like to draw the attention of the House to one specimen list of figures covering the four quarters of last year and the first quarter of this year for the Rhine Army. Serious though these figures are, it will be noticed that they build up to a certain point, and then go down. What we hope is that this decline will be accelerated. For the first quarter of 1946, the Rhine Army figures were 30.4 per thousand; for the second quarter, 41.8; for the third quarter, 44.6; for the fourth quarter, 41.8; and for the first quarter of this year 30 per thousand. The buildup in the middle of last year, and the reduction at the end of last year and the beginning of this year, are reflected substantially in the Commands.
It is perhaps also worth pointing out—although I need hardly say that I make no political point of this, it is an interesting statistic—that while these are terrible figures, they are on this occasion lower than they were for a similar period after the first world war Once again, one must be careful not to make too much of that, but I would remind the House that men are far more ready to report this disease than they were in the past when disciplinary action was taken against them, and we can have some modified satisfaction that the figures are not so high. My hon. Friend asks why the incidence of the disease in the Middle East should be lower than in the Far East and North Western Europe. His guess is as good as mine. I cannot give a clear answer, but I would say that the conditions under which men live in the Services in the Middle East, substantially removed from female companionship, has a great deal to do with it.

Dr. Segal: I spoke about the low incidence in the Middle East which is easy to explain, but I would ask why the figures are so high in the Far East and in Europe.

Mr. Freeman: The relative highness and lowness are converse in the same picture. But the fact is that in the Middle East the conditions are not conducive to venereal disease. In Germany and Austria and in the Far East they are, and in both areas the incidence of the disease among the civilian population is high. In the Far East it has been extremely difficult to control the sources of infection and only recently have we started to make progress in this side of the problem. I should like to say we recognise fully the importance of trying to give the Service man the opportunity of making civilian contacts during his Service life and I have obtained some figures which prove to my satisfaction that we have more civilians doing welfare work overseas than we had during the war. I do not say we could not use more of these workers, but in the Rhine Army—from which area figures of the disease were taken—whereas there are 187 N A.A.F.I. or Service canteens, there are 207 rest centres and canteens run by voluntary bodies, and there are 928 voluntary civilian workers operating. These workers are going a great job in helping to raise the standard of civilian life. My hon. Friend's remarks about the


work of the chaplains, and education, I can only endorse.
It is quite obvious that, while it is possible to take medical measures to limit the seriousness of this problem where it has started, the way to eliminate the problem altogether is by a moral, educational and welfare approach. We are doing the best we can in that direction and I do not want my hon. Friend to think we have overlooked the value of giving lectures to the soldiers before they leave their stations to go abroad. These obvious points have been thought of, and effect is being given to them. We cannot solve this problem merely by rule of thumb. It can be solved only if the War Office and the soldier co-operate and if the House and the public generally recog-

nise the seriousness of the problem in trying to cope with it. If any hon. Members have any suggestions to make that will help us in this problem I shall be only too glad to hear of them, and, if at all possible, put them into effect. In the meantime, I repeat that our view of this matter is that it is exceedingly serious and something that we cannot possibly afford to take lightly. We are doing our very best to cope with it, and on the figures we possess I think we have some ground for thinking, at the moment, that our efforts are being rewarded with, at any rate, a limited degree of success.

Adjourned accordingly at Two o'Clock.